Bankless 214 - L2 Tokens: Bullish or Bearish? with Sassal, Jordi, & Ippolito
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Mar 18, 2024 
Join Mike Ippolito, a relentless podcaster from BlockWorks, Jordi Alexander, the Chief Alchemist at Mantle, and Anthony Sassano, creator at Daily Gwei, as they dive into the world of Layer 2 tokens. They tackle whether these tokens are truly valuable or just governance gimmicks. The trio dissects Layer 2 business models, the implications of current trends, and the challenges in accurately valuing these assets. Expect insights on innovations in DeFi, investment strategies amid market cycles, and the future landscape of blockchain ecosystems.
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L2 Token Value Accrual Uncertainty
- Layer 2 tokens face uncertain long-term value accrual, despite short-term hype cycles as "ETH beta."
- Competition and open questions about their value capture mechanisms make long-term predictions difficult.
Short-Term vs. Long-Term L2 Value
- Short-term L2 token valuations are driven by market cycles and hype (12-18 months).
- Long-term value (5+ years) is uncertain due to rapid industry changes and moat challenges.
L2 Business Model and Token Valuation
- Layer 2s profit by selling marked-up Ethereum block space, benefiting from not paying for security.
- However, token prices don't always reflect fundamentals; other factors influence valuations.