The blockchain industry is constantly evolving, with new chains being launched regularly. However, there is a growing sentiment of skepticism towards these new projects. People are starting to question the necessity of launching yet another chain in an already saturated market.
The recent raises by Camp Network, Unto, and Miden have raised eyebrows among industry observers. With valuations reaching hundreds of millions of dollars, the question on everyone’s mind is, “Why launch another chain?”
One explanation could be the lure of the “L1 premium.” Projects like SUI have seen their token prices skyrocket, despite not necessarily having strong fundamentals to support such growth. This could be driving founders to launch new chains in the hopes of cashing in on the hype.
On the other hand, founders may have legitimate reasons for launching new chains. Different visions on how a chain should be optimized, from the design of the execution environment to the capture of MEV, can lead to the creation of new projects. These technical and social considerations play a crucial role in determining the success of a chain in the long run.
While the proliferation of new chains may seem overwhelming, there is some solace in the fact that L1 valuations are starting to compress. Compared to previous cycles, where valuations reached astronomical levels, recent raises have been more modest. This could indicate a correction in the market, as investors become more discerning about where they put their money.
Despite the frustration with the number of chains being launched, there is also a desire to see more applications being developed. Interestingly, consumer apps received more funding than infrastructure projects in the past, but the trend has now reversed. VCs seem to be more interested in investing in infrastructure projects, as they offer a longer runway for returns.
Ultimately, the blockchain industry is a complex ecosystem with competing interests and visions. While the launch of new chains may seem excessive, it is a reflection of the economic freedom that the industry prides itself on. As the market continues to evolve, we can expect to see a shift in focus towards more practical applications and sustainable growth.