Understanding the Evolution of Blockchain Valuation: From Cynicism to Faith

By: crypto insight|2025/11/28 10:00:10

Key Takeaways:

Shift in Sentiment: The blockchain industry has seen a transition from financial nihilism to financial cynicism, where assets are acknowledged to have value but are considered overvalued.
Current State of Market: The latest trends indicate a rising skepticism of blockchain’s inherent value, with new chains facing immediate criticism rather than indifference or enthusiasm.
Importance of Index Growth: Belief in exponential growth has diminished, yet historical parallels with sectors like e-commerce highlight the importance of recognizing blockchain’s potential.
Value in the Long Game: Despite current attitudes, the enduring belief in major cryptocurrencies like Ethereum and Solana remains significant among discerning investors who understand the technology’s long-term promise.

WEEX Crypto News, 2025-11-28 09:45:08

Introduction: A Shift in the Blockchain Discourse

In recent years, the discourse surrounding blockchains has drastically shifted, characterized by a wave of cynicism that challenges the very valuation of these digital assets. The once-enthusiastic explorations of new blockchains have been replaced with skepticism and outright disdain, as evidenced by the hostile reception to newly launched chains like Monad, without these projects even having the chance to prove themselves on the mainnet. This attitude is emblematic of a broader psychological shift within the market, reflecting a move from financial nihilism—where the perceived value of these assets was deemed meaningless—to a state of financial cynicism. Within this framework, assets are acknowledged to possess some intrinsic value, yet are considered vastly overvalued, creating a precarious atmosphere for investors.

The Cynicism in Detail: Financial Skepticism

This growing cynicism regards the valuation of public blockchains with suspicion, claiming that their actual worth could be a mere fraction of their current market prices. Detractors argue that market valuations are inflated, waiting for a reckoning by major financial players like Wall Street. This pervasive sentiment has spurred efforts from bullish analysts to counteract the negativity by promoting optimistic valuations for Layer 1 blockchains. They apply various economic models and metrics, such as price-to-earnings ratios and discounted cash flows, in an attempt to rationalize the high market valuations.

Notably, Solana’s adoption of the Realized Economic Value (REV) was heralded as a breakthrough in proving valuation soundness. However, skepticism crept back in as the measure quickly lost favor, although Solana’s market performance did not directly reflect this decline. REV, while innovative, is not inherently flawed. Rather, the real conflict lies not in metrics but in prevailing attitudes towards blockchain valuation as a whole.

The Misunderstanding of Blockchain Potential

Despite the pessimism expressed on platforms like Crypto Twitter, it’s crucial to understand that the financial indicators most often used to evaluate traditional businesses don’t always apply neatly to blockchain technologies. Blockchain’s value proposition doesn’t lie purely in direct profitability, but in its potential for facilitating an interconnected, global financial market. While certain platforms have proven to generate revenue—such as the Hyperliquid DEX with its structured buyback mechanisms—these platforms do not represent the entirety of blockchain’s value. Layer 1 blockchains like Ethereum and Solana should not be primarily valued for direct profitability. Investors seeking high operating margins might better serve their interests through investments in conventional profit-generating entities like exchanges or fintech companies.

The focus of investment should thus be on blockchain’s capability to enable exponential innovation and its transformative potential for the entire financial ecosystem. Attempting to value such platforms purely through conventional financial performance metrics undercuts the broader value potential they represent.

The Rise and Fall of Financial Metrics in Crypto

The debate over appropriate valuation approaches is not new. In particular, the challenge of applying traditional financial metrics to novel forms of digital assets has been persistent. While financial metrics like PE multiples are critical for certain sectors, applying them to blockchain without considering the unique growth potential could lead to misjudgments. A growing sentiment among crypto investors is that the sector might not be able to replicate historical growth trajectories seen in past technological booms. However, examining past industry shifts, such as the rise of e-commerce, reveals the inherent potential of blockchain to impact large sectors not due purely to short-term financials but because of the promise of exponential value transformations.

Embracing Long-Term Growth in Blockchain

It is worth revisiting the narrative of exponential versus linear growth—a vital aspect often misunderstood in periods of market volatility. The journey of Amazon from its inception exemplifies the nature of exponential growth. For 22 years, detractors labeled Amazon as unprofitable, focusing myopically on short-term metrics rather than the exponential trajectory of growth that was occurring. For entities like Ethereum, only just over a decade old, applying similar timeframes suggests the potential for becoming massively transformative is still unfolding. Over the years, the patience of investors who believed in Amazon’s long-term vision was rewarded handsomely as the company grew far beyond expectations. Likewise, current market dynamics in blockchain technology might mean looking beyond current skepticism and recognizing its systemic potential to shift entire financial paradigms.

The Case for Blockchain’s Incremental Growth

The crux of understanding blockchain’s potential lies in accepting its non-linear growth paths. While some investors may focus on short-term price fluctuations, the technology’s foundational role in enabling an interconnected and open financial system should not be disregarded. The relentless pace of adoption and integration, despite regulatory pressures and economic critiques, underscores blockchain’s resilience and long-term viability. As the internet reshaped communication and commerce, blockchain stands poised to redefine transactional and financial landscapes globally.

Moreover, predictions of the demise of blockchain as an overvalued craze often overlook significant parallels with transformative technologies of the past. These narratives fail to capture the broader context in which these technologies operate—where the potential for mass adoption and reshaping industry standards eclipses short-term financial indicators.

Conclusion: A Narrative of Understanding

As blockchain technology continues to evolve, embracing a narrative of growth that parallels historical precedents in other sectors could prove beneficial. Cynicism may lead to temporary market retrenchments, but overlooking the broader potential of blockchain infrastructures risks missing out on transformative shifts that align with long-term digital and economic trends.
If stakeholders—both investors and consumers—maintain focus on the overarching potential blockchain presents, the technology will likely continue its upward trajectory towards fundamentally reshaping global finance.

FAQs

Why is there growing skepticism about blockchain valuations?

The skepticism stems from a perception that blockchain assets are overvalued and lack meaningful substance, paralleling a broader shift towards financial cynicism. Critics argue that current market prices of blockchains exceed their actual worth, given their performance and profitability metrics.

How do traditional financial metrics apply to blockchain technologies?

Conventional metrics like PE ratios don’t fully capture blockchain’s value, which is rooted more in potential connectivity and global system integration than direct profitability. Such metrics can misrepresent the value of tech with transformative ecosystems.

Can blockchain achieve the same exponential growth seen in other sectors?

Yes, historically, exponential growth trends in sectors such as e-commerce were once met with skepticism but later achieved breakthrough success. Blockchain’s growth potential parallels these trajectories, though it faces unique challenges including regulatory scrutiny.

What could convince investors of blockchain’s value in the future?

A shift in narrative from focusing on immediate profitability to recognizing blockchain’s broader potential to reshape finance, in conjunction with successful implementation of scalability and integration, could enhance investor confidence in its value.

Are major cryptocurrencies like Ethereum and Solana overvalued?

Despite criticism, belief in their long-term potential remains strong among informed investors, based on their position in facilitating and enhancing decentralized financial systems globally. Their perceived overvaluation often discounts broader systemic impacts.

Over the past 24 hours, the crypto market has shown strong momentum across multiple dimensions. The mainstream discussion has focused on Coinbase's official entry into the prediction market through the acquisition of The Clearing Company, as well as the intense controversy within the AAVE community regarding token incentives and governance rights.

In terms of ecosystem development, Solana has introduced the innovative Kora fee layer aimed at reducing user transaction costs; meanwhile, the Perp DEX competition has intensified, with the showdown between Hyperliquid and Lighter sparking widespread community discussion on the future of decentralized derivatives.

I. Mainstream Topics

1. Coinbase Acquires The Clearing Company, Officially Entering Prediction Market

This week, Coinbase announced the acquisition of The Clearing Company, marking another significant move to deepen its presence in this field after last week's announcement of launching a prediction market on its platform.

The Clearing Company's founder, Toni Gemayel, and the team will join Coinbase to jointly drive the development of the prediction market business.

Coinbase's Product Lead, Shan Aggarwal, stated that the growth of the prediction market is still in its early stages and predicts that 2026 will be the breakout year for this field.

The community has reacted positively to this, generally believing that Coinbase's entry will bring significant traffic and compliance advantages to the prediction market. However, this has also sparked discussions about the industry's competitive landscape.

Jai Bhavnani, Founder of Rivalry, commented that for startups, if their product model proves to be successful, industry giants like Coinbase have ample reason to replicate it.

This serves as a reminder to all entrepreneurs in the crypto space that they must build significant moats to withstand competition pressure from these giants.

2. Kalshi Launches Kalshi Research and Integrates BSC Network

Regulated prediction market platform Kalshi launched its research arm, Kalshi Research, this week, aimed at opening its internal data to the academic community and researchers to facilitate exploration of prediction market-related topics.

Its inaugural research report highlights Kalshi's outperformance in predicting inflation compared to Wall Street's traditional models. Kalshi co-founder Luana Lopes Lara commented that the power of prediction markets lies in the valuable data they generate, and it is now time to better utilize this data.

Meanwhile, Kalshi announced its support for the BNB Chain (BSC), allowing users to deposit and withdraw BNB and USDT via the BSC network.

This move is seen as a significant step for Kalshi to open its platform to a broader crypto user base, aiming to unlock access to the world's largest prediction market. Furthermore, Kalshi also revealed plans to host the first Prediction Market Summit in 2026 to further drive industry engagement and development.

3. AAVE Token Incentive Controversy Persists as Founders and Whales Increase Holdings Against the Market Trend

The AAVE community recently engaged in heated debates around an Aave Improvement Proposal (AIP) titled "AAVE Tokenomics Alignment Phase One - Ownership Governance," aiming to transfer ownership and control of the Aave brand from Aave Labs to Aave DAO.

Aave founder Stani Kulechov publicly stated his intention to vote against the proposal, believing it oversimplifies the complex legal and operational structure, potentially slowing down the development process of core products like Aave V4.

The community's reaction was polarized. Some criticized Stani for adopting a "double standard" in governance and questioned whether his team had siphoned off protocol revenue, while others supported his cautious stance, arguing that significant governance changes require more thorough discussion.

This controversy highlights the tension between the ideal of DAO governance in DeFi projects and the actual power held by core development teams.

Despite governance disputes putting pressure on the AAVE token price, on-chain data shows that Stani Kulechov himself has purchased millions of dollars' worth of AAVE in the past few hours.

Simultaneously, a whale address, 0xDDC4, which had been quiet for 6 months, once again spent 500 ETH (approximately $1.53 million) to purchase 9,629 AAVE tokens. Data indicates that this whale has accumulated nearly 40,000 AAVE over the past year but is currently in an unrealized loss position.

The founder and whale's increased holdings during market volatility were interpreted by some investors as a confidence signal in AAVE's long-term value.

4. Top Articles: DeFi Curators and Ethereum Annual Summary

In this week's top article, Morpho Labs' "Curator Explained" detailed the role of "curators" in DeFi.

The article likened curators to asset managers in traditional finance, who design, deploy, and manage on-chain vaults, providing users with a one-click diversified investment portfolio.

Unlike traditional fund managers, DeFi curators execute strategies automatically through non-custodial smart contracts, allowing users to maintain full control of their assets. The article offered a new perspective on the specialization and risk management in the DeFi space.

Another widely circulated article, "Ethereum 2025: From Experiment to Global Infrastructure," provided a comprehensive summary of Ethereum's development over the past year. The article noted that 2025 is a crucial year for Ethereum's transition from an experimental project to global financial infrastructure. Through the Pectra and Fusaka hard forks, Ethereum achieved significant reductions in account abstraction and transaction costs.

Furthermore, the SEC's clarification of Ethereum's "non-securities" nature and the launch of tokenized funds on the Ethereum mainnet by traditional financial giants like JPMorgan marked Ethereum's gaining recognition from mainstream institutions. The article suggested that whether it is the continued growth of DeFi, the thriving L2 ecosystem, or the integration with the AI field, Ethereum's vision as the "world computer" is gradually becoming a reality.

II. Mainstream Ecosystem Updates

1. Solana: Launches Kora Fee Layer and propAMM Data Research

The Solana Foundation engineering team released a fee layer solution called Kora this week.

Kora is a fee relayer and signatory node designed to provide the Solana ecosystem with a more flexible transaction fee payment method. Through Kora, users will be able to achieve gas-free transactions or choose to pay network fees using any stablecoin or SPL token. This innovation is seen as an important step in lowering the barrier of entry for new users and improving Solana network's availability.

Additionally, a deep research report on propAMM (proactive market maker) sparked community interest. The report's data analysis of propAMMs on Solana like HumidiFi indicated that Solana has achieved, or even surpassed, the level of transaction execution quality in traditional finance (TradFi) markets.

For example, on the SOL-USDC trading pair, HumidiFi is able to provide a highly competitive spread for large trades (0.4-1.6 bps), which is already better than the trading slippage of some mid-cap stocks in traditional markets.

Research suggests that propAMM is making the vision of the "Internet Capital Market" a reality, with Solana emerging as the prime venue for all of this to happen.

2. Perp DEX: Hyperliquid vs. Lighter Competition Intensifies

The competition in the perpetual contract DEX (Perp DEX) space is becoming increasingly heated.

In its latest official article, Hyperliquid has positioned its emerging competitor, Lighter, alongside centralized exchanges like Binance, referring to it as a platform utilizing a centralized sequencer. Hyperliquid emphasizes its transparency advantage of being "fully on-chain, operated by a validator network, and with no hidden state."

The community widely interprets this as Hyperliquid declaring "war" on Lighter. The technical differences between the two platforms have also become a focal point of discussion: Hyperliquid focuses on ultimate on-chain transparency, while Lighter emphasizes achieving "verifiable execution" through zero-knowledge proofs to provide users with a Central Limit Order Book (CLOB)-like trading experience.

This battle over the future direction of decentralized derivatives exchanges is expected to peak in 2026.

Meanwhile, discussions about Lighter's trading fees have surfaced. Some users have pointed out that Lighter charged as much as 81 basis points (0.81%) for a $2 million USD/JPY forex trade, far exceeding the near-zero spreads of traditional forex brokers.

Some argue that Lighter does not follow a B-book model that bets against market makers, instead anchoring its prices to the TradFi market, and the high fees may be related to the current liquidity or market maker balance incentives. Providing a more competitive spread for real-world assets (RWA) in the highly volatile crypto market is a key issue Lighter will need to address in the future.

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