Research Summary
The report discusses the launch of high-performance PoS blockchains in 2023, including Aptos, Sei, and Sui, which offer similar benefits to Ethereum. However, these new networks have seen lackluster demand, suggesting they may be overvalued compared to their 2021 predecessors. The report also highlights the increased competition from L2 development and adoption, and the potential struggle for these new networks to compete with incumbent Alt L1 winner, Solana.
Key Takeaways
Introduction of New PoS Blockchains
- Launch of Aptos, Sei, and Sui: These new PoS blockchains were introduced in 2023, offering similar benefits to Ethereum such as low transaction fees and high throughput.
- Unique Programming Languages: Sui and Aptos, developed by ex-Meta Diem blockchain engineers, introduced a new blockchain-optimized programming language, Move. Sei, on the other hand, uses CosmWASM, tapping into an existing ecosystem of Cosmos developers.
- Lackluster Demand: Despite their benefits, these new networks have seen lackluster demand, as indicated by onchain TVL and daily active addresses.
Comparison with 2021 Predecessors
- Overvaluation of 2023 Alt L1s: The report suggests that the 2023 Alt L1s may be overvalued compared to their 2021 predecessors, which were seen as a “growth” trade during the bull market.
- Increased Competition: The competition has intensified in 2023 due to an explosion in L2 development and adoption.
- Struggle to Compete: Without a breakout of a new desirable consumer dApp on a 2023 Alt L1, these new networks may struggle to compete with Solana, an incumbent Alt L1 winner.
Actionable Insights
- Monitor the Performance of New PoS Blockchains: Keep an eye on the performance of Aptos, Sei, and Sui, and how they compare to Ethereum and their 2021 predecessors.
- Assess the Valuation of 2023 Alt L1s: Consider the potential overvaluation of 2023 Alt L1s in comparison to their 2021 counterparts.
- Consider the Impact of L2 Development: Take into account the increased competition from L2 development and adoption, and how it may affect the performance of new and existing Alt L1s.
