PANews posted on X (formerly Twitter) discussing the valuation of Layer 1 blockchains, particularly Ethereum. Raoul Pal suggests a unique perspective on assessing Ethereum's value, emphasizing the impact of shutting down the network rather than focusing solely on fee income or traditional financial models like discounted cash flow (DCF). If Ethereum were to cease operations, stablecoins, DeFi, Layer 2 solutions, and NFTs would be severely affected, highlighting Ethereum's foundational value.
The intrinsic value of Layer 1 blockchains is derived from the assets they support, developer activity, liquidity, capital flow, and ecosystem density. Ethereum is noted for its deep ecosystem and developer network, while Solana and Sui are recognized for their speed, cost-effectiveness, and efficiency. Therefore, valuing public blockchains involves assessing network effects, ecosystem density, and their role as digital economic infrastructure, rather than merely calculating cash flow.