Opinion: Ethereum is not a company but a new species

Author: Lanhu Source: X, @lanhubiji

In the value narrative of Ethereum, it is not suitable to use the DCF of traditional web2 companies, or REV or something like that. Once you fall into the narrative trap of profit or income, Ethereum will instantly become a web2 company. Ethereum is not a web2 company. It is a decentralized on-chain network, a new species different from web2 companies.

Once it is compared with web2 companies, it will be completely confused. Its own characteristics will be completely ignored, and it will enter a vague stage that requires self-certification. Once anything is self-certified, it will fall into a meaningless quagmire. This is completely unfavorable to the valuation narrative of Ethereum and is not suitable. Ethereum is a new species and needs to be viewed from a new dimension.

So, what is the most important value narrative of Ethereum? Going back to the foundation of the existence of the crypto field, that is the most difficult part of it and the deepest part of the moat: security based on decentralization. Why is it the most difficult? This kind of decentralized security construction requires not only technology, but also consensus and supporting infrastructure construction, which requires a long period of accumulation. The longer the reliable time, the greater the value (not downtime chain/rollback chain/frozen chain). This is different from traditional web2 companies. No matter how big a web2 company is, it may be replaced once market demand changes or new technologies are born. For example, Kodak in the photography industry and Nokia in the mobile phone industry in history. But in the web3 field, the threshold for building a decentralized network is extremely high. Once it is built, it will have a very high moat. This cannot be solved by money, and as time goes by, the proportion of security factors is getting higher and higher. More importantly, Ethereum is not doing specific business. It is a basic platform that provides services for products or market needs. It is neutral. Neutrality means that the user needs and market above are changing, and the technology is changing. As long as its foundation is there (decentralized security), it will be there. Its ultimate goal is to be tasteless, bland, and passionless like water, but ubiquitous.

From this perspective, whoever can carry the largest assets, whoever has the higher security value, and whoever has the highest moat. Once it reaches a certain critical point, it will have the opportunity to become a new platform that carries more than tens of trillions of dollars of human assets. It is hard to imagine that institutions and companies will build their financial products or services on a downtime chain or a frozen chain.

As the most basic neutral financial infrastructure (in sharp contrast to the traditional SWIFT that may be weaponized), it will become a new species that appears for the first time in human history.