Crypto’s valuable business models include three categories: enterprises, protocols, and currencies themselves. (Previous summary: IOSG founder: Meme is like opium, encryption ideals require a prairie fire) (Background supplement: IOSG report | A new narrative of infra from AI combined with Web3 technology stack) Recently, there have been many comments on Ethereum and L2 Criticism of value accumulation and the rapid exploratory development of Ethereum and L2 have brought difficulties to their value assessment. This article attempts to give some directions for thinking. Before talking about how to specifically view the business models of Ethereum and L2, let’s first take a look at the business model of the entire Crypto. 1. Crypto’s business model 1. The core of the “enterprise” type: control + monopoly (license), price discrimination brings profits. The focus of this type of model is to achieve the goal of increasing revenue through a high degree of control over services and protocols, and to achieve the goal of increasing revenue. The operating principles of traditional companies are the same. Decentralization here is highly dispensable and only needs to be acceptable to users. As a profit-oriented company in nature, it needs to ensure efficient execution, so control diplomacy should not occur. For such projects, the competition is about the business model, that is, the ability to price discriminate, the speed of response to meet user needs, and the ability to bring about user growth. Token is mainly a means of acquiring customers and capitalizing. Taking the Solana Foundation as an example, it has a high degree of control over the ecology, and it can be said that it even has the power to shut down. Solana, which calls itself Global Onchain Nasdaq, has always placed a strong emphasis on fundamentals, especially business model and profits, which form the core value of this story. Solana's income mostly comes from MEV income, which is the price discrimination caused by monopolizing block space. The SOL asset itself is a centralized asset-based tool. 2. The core of the "protocol" category: no permission to participate (asset issuance, business), open and relatively fixed charging standards. The focus of this category is to create an open and almost unchangeable protocol standard, behind which are DAOs and funds. However, it is less involved in the governance of the meeting and allows more autonomy in the execution of agreements. The use of the protocol is permissionless, and the profit model is open and difficult to change. Anyone can use the protocol to build markets and assets to obtain their own business or profits. "Protocols" often have another assessment of the degree of autonomy, that is, the degree of decentralization has a range. The lowest is that the team has the right to update the protocol and is subject to market supervision; the worst is to destroy its own update rights and hand over the product to the market. , there are varying degrees of hard or soft decentralized governance differences. Tokens here play more of a dividend and governance role. For such projects, the test is the sustainability of product operation, the sustainability of demand, and the network effect brought about by the entry time. It is often found that the pioneers of PMF have significant competitive advantages. 3. "Asset" category Core: Focus on the value of the asset itself, including BTC, Memecoin, decentralized algorithm stablecoins, etc. The asset itself has gained consensus based on its characteristics, and the empowerment of the asset is continuously completed based on this. The properties of the asset itself include three aspects. First, the consensus and network effects brought about by "earliest adoption" in specific scenarios, such as BTC as a value store, USDT as a payment medium, and ETH as an asset issuance; second, the asset mechanism attributes, including rarity, deflation mechanism, price anchoring, etc.; the third is the wide acceptance and dissemination due to its symbolic meaning, such as the widely understood BTC as "digital gold", ETH "programmable credit currency", The cultural effect of Memecoin, etc. For such projects, the test is the strength of consensus and the ability to adopt and sustain assets. In the Crypto world, different projects and assets correspond to the above business models or combinations of models. We can also try to use this perspective to evaluate the current Ethereum and L2. 2. What is the business model of L2? 1. The current positioning of L2. The initial positioning of L2 is Scaling of Ethereum, which carries Ethereum transactions on a large scale. This purpose has actually been achieved to a certain extent. From the perspective of diverting Ethereum transactions and bringing about increments, it is relatively successful. At present, L2 has become an important part of the Ethereum ecosystem, accounting for 85% of the total number of transactions and 31% of the transaction volume, making it an important part of Ethereum's fundamentals. Source: Dune Analytic The number of active addresses is 3-4 times that of Ethereum. Since L2 transaction costs are cheap, the actual increase in the overall transaction data of Ethereum will be falsely high, but the impact of L2 adoption can still be seen. However, L2 did not bring the same proportional increase in revenue to Ethereum under such transactions. The income brought by L2 is mainly divided into two aspects. The first is the DA fee. Before EIP4844, it is the transaction data fee, and after EIP4844, it is the Blob fee. The second one is MEV. Except for the current Based Rollup, L2 has completely absorbed this revenue into its own pocket, and in the short term, the expectation of giving back to Ethereum is low. This actually makes Ethereum currently enter inflation, and the concept of ultrasonic currency is gradually declining. Here is an explanation of why DA fees cannot become an income contribution from L2 to L1. DA will only generate priority fees when it reaches a saturated state, that is, monopoly pricing power. DA is a commodity in an unsaturated state. In the long run, users can hedge and find replacements. The demand growth rate of DA is disproportionate to the supply growth rate. There is a large proportion of robot transactions in L2, and these transactions are not as necessary as real user transactions. If the C-side costs brought by DA fees are too high, this part of the transaction will naturally slow down. Therefore, it is not a reasonable conclusion to say that if the number of transactions increases several times, the blob will be saturated. In essence, expansion itself is contrary to DA charging. In the pursuit of continuous expansion, making money should not be designed based on the congestion of transactions. The architecture of Ethereum L2 also inherently refers to this. Previously regarded as a Beta asset of ETH, it is still narratively correct, and L2 still calls itself "Ethereum L2". Fundamentally, it has gone further and further. In the future, L2’s income will no longer mean Ethereum’s income. Both should have their own valuation systems. 2. What are the business models of different L2s? Universal L2 Universal L2 refers to the universal L2 and pursues itself to become an application ecosystem. Many of the early Universal Rollups were in the form of alliances. Most of the current Universal Rollups with better performance have made innovations in the profit distribution mechanism to better encourage developers to innovate and retain, and users to actively participate. The trend of L2 is to gradually no longer rely too much on Ethereum and maximize its customizability through some modular solutions. The management method of Universal L2 is to expand outwards with each team as the core. The competition faced by Universal L2 is directly from the competition of external L1. Universal L2's income is derived from its profit distribution...