The post Alliance DAO Says It Won’t Short L1s, But Calls Them Low-Quality Bets appeared on BitcoinEthereumNews.com.

Qiao Wang of Alliance DAO doubts the long-term value of L1 tokens, citing lack of a strong moat. He views L1 tokens as “low-quality bets” but doesn’t believe they are bad investments overall. Wang suggests the app layer offers more secure investment opportunities with stronger value capture. The debate over the value of Layer-1 blockchains flared up this week. Alliance DAO co-founder Qiao Wang said most L1 tokens don’t have lasting strengths. Meanwhile, Dragonfly’s Haseeb Qureshi released a long essay arguing that smart-contract chains will hold long-term value.  Their exchange shows a divide between investors bullish on crypto’s growth and those who think the hype exceeds the fundamentals. L1s Have “No Moat” and Are Becoming Commodities Qiao Wang responded to Qureshi’s essay by explaining why he finds it hard to hold L1 tokens for the long run. His issue is not traditional valuation metrics but rather his belief that L1s lack strong “moats.” Wang argues that users can easily switch between chains, developers can redeploy their apps without much trouble, and creating a new blockchain is now fairly simple. Because of this, he sees L1s as mostly interchangeable, not defensible platforms. He compared this to something like Amazon Web Services, where high switching costs and deep integration create a strong moat that’s hard for competitors to copy. Blockchains, on the other hand, don’t have that kind of lock-in. Wang’s takeaway is not that L1s are bad investments, just that they’re “7/10s” in a market that has “9/10s”. He wouldn’t short them, but he doesn’t see them as top long-term picks. He believes the best way for chains to build a real moat is to “verticalize” — to own both the blockchain and the application layer. Solana, Base, Hyperliquid, and newer corporate chains like Tempo are, in his view, already heading…

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Filed under: News - @ November 29, 2025 11:35 pm