Podcast Summary/Notes: UCC with Su Zhu & Hasu on Ethereum vs. Alt L1s

6 min readDec 14, 2021


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Listen to the full podcast here: https://youtu.be/m_2fDTuh5aU

High-level summary:

  • Ethereum will continue to compete with Bitcoin for the store-of-value use case
  • Ether made significant trade-offs to fulfil a better role at “being money” but lost its network effect of onboarding new users and devs against alternative L1s like Avalanche, Solana, Terra and Binance Smart Chain
  • Ethereum maxis are the new Bitcoin maxis
  • Alternative L1s will continue to outperform in the long-run
  • Su still owns more ETH than anybody else he knows but if he would have realised earlier how L1 Alts would outperform Ethereum he would have sold more for SOL etc.
  • ZKrollups are going to be everywhere, not just on Ethereum
  • Su doesn’t believe (or at least doesn’t have strong conviction) in the view that “it all comes back to Ethereum because it started there
  • 9 out of 10 projects are building on non-Ethereum today
  • People will not interact with blockchains directly, but they will interact with applications that then interact with a blockchain. The app devs will make the decision on which blockchain(s) to use. Users might not even know which blockchain is used in the background.

Full summary:

This has been written while listening to all the 90 minutes, you can keep typos and other errors :)

  • Bitcoin and Ether relatively flat for months; BNB, SOL, LUNA & AVAX are up a lot (both in comparison to USD and ETH)
  • Recent tweets got more than 15k likes: new people resonate with Su’s views, crypto belongs (and should be usable for everyone) and not only OGs
  • Bitcoin and Ether have a lot in common: Focus on decentralisation > scaling with Layer 2
  • There is a gap between the ambitions of Ethereum and the reality of execution but also Bitcoin has not done much (or even less), therefore the chance of Ether flipping Bitcoin is still real
  • Ethereum OGs focus on “holy truth” > value the decentralisation of L1 and wait for L2 but new users don’t want to wait
  • In the last bear market, some funds like Multicoin had a very different thesis: they asked themselves, what kind of networks will attract new users and ended up investing in BNB, SOL etc.
  • There is a cognitive dissonance between what OGs think and how the reality works, e.g. half of MetaMask users are BSC users and in comparison, active addresses on Ethereum are not that much higher than in 2017
  • Eth maxis make the same mistakes as Bitcoin maxis (“Everything will be built on Ethereum”) but for the same reasons Ether gained on Bitcoin, new networks are gaining now on Ether
  • Does everyone need the level of decentralisation that Ethereum upholds? Based on the current market: no.
  • New users “want to be early to something” > Are network effects less important than people trying to be early and enjoy the same gains as others years ago? This is dystopian for OG bag holders but not necessarily for the new users
  • Many BTC and ETH investors don’t even use the underlying blockchain but have their assets sit on Coinbase etc. whereas alternative L1s are actually used (in terms of the ratio of holders)
  • Ethereum has a good chance of sharing the “market of money” with Bitcoin but has less chance of being the only dominant smart contract platform (Ethereum has over-optimized to be money)
  • User experience on L1 has not 10x in 5 years
  • What really has taken off in DeFi recently are cross-chain projects, not Ethereum-only projects
  • If the main claim of Ethereum is it being a “birthplace” of innovation, that’s not enough
  • New developers are multi-EVM, they deploy where the users are
  • Su believed it will benefit from the rise of EVM compatible chains and yes it did but not as much as expected, L1 alternatives have risen much more in comparison
  • The incentive to build goes down if you are already wealthy (this harms BTC and ETH); the higher number of aggressive builders are now to be found “on new chains”
  • Are these other chains are developing in another way than Bitcoin and Ethereum? They already have, they are attracting all the new users.
  • Many Ether OGs are in a state of mind where they are rich already and others have to appreciate how this has been achieved and everybody has to follow the same path “to make it”
  • Culture does matter because what is each community offering to new users/devs, what is possible for them to do?
  • “Rent being paid to the holder of the native coin” > this leads to a loss of network effect before scaling is achieved
  • L1 alternative scaling has also limits and it may get to a similar point where Ethereum is now (where again additional scaling e.g. through L2 is necessary)
  • The roadmaps in the endgame might all look similar > so who will execute first and best?
  • Who will serve users over holders?
  • If two blockchains have the same roadmap, the newer one has a head start and not the other way round (there are many examples in existing industries that prove that)
  • Hasu: A shared database and L1 having the actual proofs: this is the only credible roadmap. Everything else is shortsighted and just a game of musical chains for incentives. Su: from investment experience, the projects that can go for 1 million users are not on Ethereum (90%), the industry is much more pragmatic and less dogmatic > it’s all about onboarding the masses (soon).
  • We can invest in BTC and ETH as stores of value BUT at the same time
  • Applications on Ethereum have suffered from fragmented and not yet flourishing L2s, so promising activities are happening on other chains. The 10x devs and enterpreneurs are on Terra, Solana, etc.
  • Kain is the ultimate example of an Ether OG who has been doing well for holding ETH and is now saying “anyone who is not building on Ethereum and its L2 is ngmi and will be “excommunicated from the citadel” — that’s a harmful belief
  • SOV can be the endgame for ETH and it even might do well doing so but DeFi, NFTs etc. will then live on other chains (Su owns still more ETH than anybody else he knows)
  • Alt L1 will continue to do very well, every L1 actually shipping code constantly is still totally undervalued; penetration of smart-contract usage is still pretty much 0% on a global scale
  • Growth of L1 alts has already been much faster than what we have seen with BTC and ETH because they don’t have technical debt, area already PoS, retroactive incentives (e.g. airdrops) on Ethereum all go to the same few thousand users from 2019, there is demand for new people who want to become active in crypto and they will all go to L1 alts, KPIs like user counts, new dev activity etc all speak for them
  • New generation of crypto builders and investors don’t even think about BTC and ETH > “Are we the boomers now?”
  • Hasu: Incentive growth is not sustainable in the long-term; Su: this has been wrong for many months now; at what point will this be correct? Can you afford to believe this? New users don’t have that allegiance to Ethereum as you (Hasu) have.
  • Starkware doesn’t belong to Ethereum (and pay rent to it), they fight for themselves (and will even offer their solution to all chains) and this is the same for all other L2s
  • All new GameFi companies are launching on BSC despite its wore technical roadmap (and strong centralization) because this is where the users are.
  • Half of all tweets from Bitcoin people is how centralized Ethereum is and we see the same for Ethereum; people dissing Alt L1s. What good does this do?
  • Ethereum maximalism is not as bad as Bitcoin maximalism (yet); but interestingly the Bitcoin community seems to begin to warm up and become more open.
  • There is always a danger for successful projects to becoming out of touch with reality, users and devs
  • Su had a blind spot themselves as he led people into wrong assumptions months ago, pretty much ignoring the rise of Terra and many others.




Crypto, DeFi & GameFi enthusiast. Qi_Capital Council and @0x_Ventures Member. Product/BizDev/Writing. Running the „Qi Podcast”: https://buzzsprout.com/1729379