Dragonfly Partner Haseeb Qureshi recently published a lengthy article titled “Defending Exponential Growth,” criticizing the market's timid atmosphere and emphasizing that encryption is still in the early stages of exponential expansion, with the long-term value of L1 still severely underestimated. He used early Amazon as a metaphor: “When you are at the front end of an exponential curve, the price-to-earnings ratio and short-term revenue data are not the focus.”
At the same time, Qiao Wang, the founder of Alliance DAO, presents a different perspective from the angle of “moats,” arguing that the application layer will be better at capturing value than L1.
Why is the new chain often viewed with skepticism? Haseeb: From financial nihilism to “financial cynicism”
Haseeb pointed out that new chains before 2023 were either unpopular or ignored, but the new chains from 2024 to 2025, including Monad, MegaETH, or Tempo, have faced much ridicule even before their mainnet launch.
He believes that the encryption community has shifted from the past “financial nihilism” to a new “financial cynicism (financial cynicism),” no longer believing in the rationality of project valuations or their potential for long-term growth, but rather certifying that everything is severely overvalued and will inevitably collapse.
However, encryption projects do have value; it's just that the market always overprices them, leading the community to give up the opportunity for subsequent explosive growth.
This emotion makes investors overlook the most critical fact, which is that exponential growth can mask all short-term uncertainties.
He emphasized: “I believe in exponential growth because I have experienced it firsthand, I have witnessed it time and time again.”
(Reject pessimism and embrace the exponential growth of successful cases: why does cryptocurrency always have a sense of “apocalypse”? )
Don't let short-sightedness misjudge long-term growth: Amazon has not made a profit for 20 years but has still become a giant, and L1 will too.
Haseeb argues that the valuation method for L1 should not use a linear growth framework, including the price-to-earnings ratio (P/E), trading fee revenue, or on-chain net income (REV), because encryption is still in the early stage of an exponential curve, similar to Amazon from 1995 to 2010.
The trend of Amazon's stock 10 years after its IPO
He used this e-commerce and cloud giant as an example to emphasize that Amazon had almost no net profit in its first 22 years before going public, its stock price stagnated for ten years and was scorned by Wall Street, only to be recognized after the index curve exploded upward.
Haseeb believes that ETH and SOL are also in a similar phase, with exponential growth in on-chain TVL, trading volume, and stablecoin issuance. Even though this is not yet reflected in current income, it does not affect future value capture.
Criticizing L1 using the price-to-earnings ratio or any linear growth framework is like criticizing Amazon for not making a profit in 2005; these metrics do not apply to industries with exponential growth, they will only continue to grow larger.
He said: “Silicon Valley understands this better than Wall Street, as the former grew up in an environment of exponential growth, while the latter grew up in an environment of linear growth. As the focus of cryptocurrency has shifted from Silicon Valley to Wall Street in the past few years, you will also see more changes.”
If you believe in exponential growth and can see far enough, then everything is still cheap now.
( What is a reasonable price for ETH? The 8 major valuation models from venture capital point to $4800, which is still undervalued by 60% )
Qiao: L1 lacks a moat and will be commoditized; investment should be in the application layer.
In contrast to Haseeb, Qiao takes a more pragmatic approach. He agrees that encryption will grow exponentially, but he does not believe that L1 can capture most of the value.
Reasons include the increasing ease of cross-chain interactions, low migration costs for developers, the underlying architecture being quickly replicable, and the lack of data-binding moats like AWS for L1: “All these factors will lead L1 to become commoditized in the long term.”
Qiao believes that the only way to build a moat for the chain is through vertical integration, such as Solana's built-in app ecosystem and excellent infrastructure, the deep binding of Base and Coinbase's massive user base, Hyperliquid's one-stop integration from L1 to exchange, or Tempo's enterprise-oriented closed ecosystem, etc:
Believing in exponential growth is taken for granted, but the best embodiment of this perspective is investing in layers with product power and network effects.
(No one cares about your chain: After enterprise-level L1 vertical integration, is there still a place for Ethereum and L2?)
Optimistic or pragmatic? The core debate over encryption valuation in the next decade.
The discussions by Haseeb and Qiao represent two opposing viewpoints in the current encryption field, advocating for optimism and pragmatism, respectively. One side is optimistic about the long-term value and large-scale adoption of L1, while the other side argues that the application layer is the greatest beneficiary.
It is not hard to foresee that the debate over the L1 valuation framework will not end, but investment attitude and time frame will only become more critical in the next decade.
This article no longer uses the price-to-earnings ratio to view L1! Haseeb re-evaluates with on-chain data: encryption is heading towards exponential growth, first appearing in Chain News ABMedia.
