Unchained Does High REV Signal a Blockchain's Strength or Its User Exploitation? - Ep. 841
May 27, 2025
Tom Dunleavy, Head of Venture at Varys Capital, argues against the emphasis on Real Economic Value (REV) as a true measure of blockchain strength. Austin Federa, Co-founder of DoubleZero, counters that REV reflects genuine blockchain activity and demand. They dive into whether high REV indicates product-market fit or just noise and discuss the implications of Layer 2 tokens. The debate explores how metrics like REV can be gamed and the future of transaction fees, touching on the broader implications for blockchain valuation.
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Fees Heading to Zero
- Fees on blockchain networks are generally headed towards zero, challenging typical valuation models based on revenue or fees.
- The core value lies in the economic security the network provides rather than transaction fees alone.
Blockchain Security Complexity
- Economic security doesn't scale linearly with token price due to factors like bug exploits and code vulnerabilities.
- Attacking a blockchain is more about hiring hackers than buying tokens, making security more complex than simple asset value.
Validators Stake for Price Gains
- Ethereum validators stake mainly for price appreciation, not primarily for network security rewards.
- The low staking rewards don’t discourage validators, reflecting economic interests beyond direct fees.