Recently, Alliance DAO founder qw(@QwQiao) proposed a startling viewpoint: "Blockchain moats are limited," and rated the moat of L1 public chains at only 3/10.
This statement quickly ignited the overseas crypto community, sparking heated discussions among crypto VCs, public chain builders, and KOLs. Dragonfly partner Haseeb angrily retorted that rating the "blockchain moat at 3/10" was utterly absurd; even Aave founder Santi, who dislikes the industry's gambling tendencies, never believed blockchain has "no moat."
Debates about the meaning, value, and business models of blockchain & cryptocurrency always resurface cyclically. The crypto industry constantly oscillates between idealism and reality: people nostalgically recall the original decentralized ideals while craving the status and recognition of the traditional financial industry, all while being mired in self-doubt about whether it's "just a repackaged casino." The root of all these contradictions might lie in scale—the total market capitalization of the crypto industry has hovered around $3-4 trillion, still dwarfed by traditional financial giants with valuations in the hundreds of billions or even trillions of dollars.
As practitioners in the industry, everyone harbors a contradictory psychology of both arrogance and inferiority—arrogant about blockchain's inception upholding Satoshi Nakamoto's ideal of de-monetization and decentralized ethos, and that the crypto industry has indeed become an emerging financial sector, gradually gaining attention, acceptance, and participation from mainstream forces; the inferiority, however, stems from feeling like a poor kid who thinks what they're doing isn't quite honorable, filled with blood, tears, and pain from a zero-sum game of man eating man. In short, the limitations of the industry's scale have bred this cyclical identity anxiety, self-doubt, and self-negation.
Today, we'll use the topic of "moat business ratings" raised by qw to discuss the existing chronic issues and core advantages of the crypto industry.
Origin of the Debate: Is Liquidity the Crypto Industry's Moat?
This major industry discussion about "whether the crypto industry has a moat" originally stemmed from a statement by Paradigm team researcher frankie: "The greatest trick the devil ever pulled was convincing crypto people that liquidity is a moat." (Odaily Planet Daily note: The original quote is: the greatest trick the devil ever pulled was convincing crypto people that liquidity is a moat.)
It's clear that as a "purebred" VC, frankie somewhat scoffs at the industry's current high regard for "liquidity is everything." After all, for investors and research experts who hold advantages in capital and information, they often want their managed funds to be spent on projects and businesses with real operational support, capable of generating genuine cash flow and continuously providing financial returns.
This view also garnered agreement from many in the comments:
- Multicoin partner Kyle Samani directly stated "+1";
- Ethereum Foundation member binji believed that "trust is the real moat; even if trust might flow due to opportunities in the short term, liquidity will always reside where trust is placed."
- Chris Reis from Circle's Arc blockchain team pointed out: "TVL always seems to be the wrong North Star metric (business guiding goal)."
- Aura Foundation's Justin Alick remarked somewhat jokingly: "Liquidity is like a fickle woman; she might leave you at any time."
- DeFi researcher Defi peniel stated bluntly: "Relying solely on liquidity is not a moat; hype can disappear overnight."
Of course, many also refuted this—
- DFDV COO & CIO Parker commented: "What are you talking about? USDT is the worst stablecoin but holds absolute dominance. Bitcoin is the (performance-wise) worst blockchain but absolutely dominates."
- Former Sequoia investor, now Folius Ventures investor KD, posed a rhetorical question: "Isn't it?"
- Fabric VC investor Thomas Crow pointed out: "In exchanges, liquidity is a moat—the deeper the liquidity, the better the user experience; this is the most important characteristic in this vertical industry, without exception. This is why the main innovation in crypto asset trading focuses on solving insufficient liquidity (which leads to worse user experience). Examples include Uniswap, which uses LPs to obtain long-tail asset liquidity, and Pump.Fun, which attracts pre-token launch liquidity through standardized contracts and bonding curves."
- Pantera investor Mason Nystrom retweeted and commented: "Liquidity is absolutely a moat." He then provided various examples: In public chains, Ethereum's leadership today is due to DeFi liquidity (and developers); CEXs like Binance, Coinbase; lending platforms like Aave, MakerDAO; stablecoins like USDT; DEXs like Uniswap, Pancakeswap.
Then came Alliance DAO founder qw's "moat rating" tweet:
In his view, the moat of the blockchain (public chain) itself is very limited, rated only 3/10.
- He believes Microsoft (key SaaS), Apple (brand + developer ecosystem), Visa/Mastercard (payment network effects), TSMC (IP + physical infrastructure) can score 10/10 (strongest moat);
- Google (search and AI IP), Amazon (e-commerce network effects + logistics infrastructure), rating agencies like Moody's, S&P, FICO (regulation-driven + brand + rating network effects), large-scale cloud computing (AWS/Azure/GCP, etc.) score 9/10;
- Meta (social network effects), NVIDIA (IP + CUDA network effects) score 8/10;
- The best crypto businesses in the crypto industry score 5/10;
- Public chains (blockchains) score only 3/10 (narrow moat).
qw further stated that a low moat rating isn't necessarily bad, but it means teams must continuously lead in innovation, otherwise they will be quickly replaced. Later, perhaps feeling the initial rating was too hasty, he added some supplementary ratings in the comments:
- The 3 major cloud service infrastructure providers score 9/10;
- BTC's moat scores 9/10 (Odaily Planet Daily note: qw pointed out that no one can replicate BTC's founding story and the "Lindy Effect," but deducted 1 point because it's unclear if it can handle security budgets and quantum threats);
- Tesla 7/10 (Odaily Planet Daily note: qw believes automated IP like self-driving is insane, but the car industry is commoditized, and humanoid robots might be similar)
- Lithography machine manufacturer ASML 10/10.
- AAVE's moat rating might be higher than 5/10, with qw's reasoning: "As a user, you must trust that their smart contract security testing is thorough enough not to lose your funds."
Of course, seeing qw so grandly play the "sharp critic," besides the debate over the "moat system," some in the comments made unrelated sarcastic remarks, even mentioning: "What about those terrible launch platforms you invested in?" (Odaily Planet Daily note: After investing in pump.fun, Alliance DAO's subsequent investments in one-click token launch platforms (like Believe) performed poorly, and even he himself didn't want to rate them)
With such a火药味十足 (fireworks-filled) focal topic, Dragonfly partner Haseeb's subsequent angry retort followed.
Dragonfly Partner's Inner OS: Nonsense, I've Never Seen Someone So Shameless
In response to qw's "moat rating system," Dragonfly partner Haseeb posted angrily: "What? 'Blockchain moat: 3/10'? That's a bit absurd. Even Santi doesn't think public chains have 'no moat.'
Ethereum has dominated for 10 consecutive years. Hundreds of challengers have raised over $10 billion trying to capture market share. After a decade of competitors trying to defeat it, Ethereum has successfully defended its throne every time. If that doesn't indicate Ethereum has a moat, I don't know what a moat is!"
In the comments of this tweet, qw gave his perspective: "You're talking about the past ('the past ten years') and are factually wrong (Ethereum no longer holds the throne on multiple metrics)."
Subsequently, the two exchanged several rounds on "what exactly is a moat?" and "does Ethereum really have a moat?" qw even brought up a post he made in November, pointing out that the "moat" in his mind is actually revenue/profit. But Haseeb immediately countered with examples—once-popular crypto projects like OpenSea, Axie, BitMEX had high revenues but actually had no moat; the real moat should focus on—"can it be replaced by competitors."
Abra Global asset management head Marissa also joined the discussion: "Agree (with Haseeb). qw's statement is a bit strange—switching costs and network effects can be strong moats—Solana and Ethereum both have these, and I believe they will become stronger than other public chains over time. They both have strong brands and developer ecosystems, which are clearly part of the moat. Perhaps he was referring to other public chains that lack these advantages."
Haseeb continued, full of sarcasm: "qw is just splitting hairs and asking for trouble."
Based on the above discussion, perhaps we should break down the "real moat" of public chains in the cryptocurrency industry and what aspects it comprises.
The 7 Components of a Public Chain Moat: From People to Business, From Origin to Network
In my opinion, the main reasons why qw's "moat rating system" seems somewhat unable to hold water are:
First, its rating standard only looks at current industry status and revenue while ignoring multi-dimensional evaluation. Whether it's infrastructure like Microsoft, Apple, Amazon Cloud, or payment giants like Visa and Mastercard, the main reason qw gives high scores is their strong revenue models. This obviously oversimplifies and superficializes the business moat of a giant company. Moreover, Apple's global market share isn't dominant, and payment giants like Visa face challenges like market shrinkage and regional business decline.
Second, it ignores the complexity and uniqueness of public chains and crypto projects compared to traditional internet businesses. As challengers to the fiat system, cryptocurrency, blockchain technology, and subsequent public chains and crypto projects are grounded in the inherent "anonymity" and "nodality" of decentralized networks, which revenue-driven traditional businesses often cannot achieve.
Based on this, I believe the moat of public chain businesses mainly lies in the following 7 aspects:
1. Technical Philosophy. This is also the biggest advantage and differentiating feature of the Bitcoin network, Ethereum network, Solana network, and countless public chain projects. As long as humans remain wary of centralized systems, authoritarian governments, and the fiat system, and accept the concepts of sovereign individuals and related viewpoints, the real demand for decentralized networks will persist.
2. Founder Charisma. Satoshi Nakamoto disappeared after inventing Bitcoin and ensuring the network ran smoothly, sitting on tens of billions of dollars in assets but unmoved; from a World of Warcraft enthusiast mistreated by the game company to Ethereum co-founder, Vitalik resolutely embarked on his decentralized spiritual journey; Solana founder Toly and others were originally elite engineers at US big tech companies but were unwilling to stop there, thus starting their own "capital internet" construction journey. Not to mention the various public chains built inheriting the ambition of Meta's Libra network with the Move language. The personal charm and appeal of founders are particularly important in the crypto industry. This is why countless crypto projects receive VC favor, community追捧 (praise), and capital influx due to their founders, but also fade into obscurity due to founders stepping down or accidents. A good founder is the true soul of a public chain and even a crypto project.
3. Developer and User Network. On this point, as emphasized by the Metcalfe effect and the Lindy effect, the stronger the network effect of something and the longer it exists, the more likely it is to persist. The developer and user network is the cornerstone of public chains and numerous crypto projects, because developers can be considered the first and most enduring users of a crypto public chain or project.
4. Application Ecosystem. A tree with roots but no branches and leaves can hardly survive; the same goes for crypto projects. Therefore, a rich, self-contained application ecosystem with synergistic effects is crucial. The reason why public chains like Ethereum and Solana can survive the winter and still exist is离不开 (inseparable from) the various application projects that continue to build. Furthermore, the richer the application ecosystem, the more it can continuously generate value and feed back into the public chain.
5. Token Market Cap. If the aforementioned aspects are the inner core and foundation of a "moat," then the token market cap is the external form and brand image of a public chain and a crypto project. Only when you "look expensive" will more people believe you "have a lot of money" and that you are a "gold mine." This applies to individuals and projects alike.
6. Openness to the Outside. Besides building their own internal循环 (circulation) ecosystems, public chains and other crypto projects also need to maintain openness and interoperability/exchange value with the external environment. Therefore, openness to the outside is also crucial. Taking public chains like Ethereum and Solana as examples, this refers to the convenience and scale of their bridging with traditional finance, user fund inflows/outflows, and various industries through windows like payments and lending.
7. Long-Term Roadmap. A truly solid moat must not only provide support in the short term but also constantly update, iterate, and innovate to maintain its vitality and longevity in the long run. For public chains, the long-term roadmap is both a North Star metric and a powerful tool to激励 (incentivize) continuous development and innovation inside and outside the ecosystem. Ethereum's success is closely related to the planning of its long-term roadmap.
Based on the above elements, a public chain can grow from zero to one, from nothing to something, gradually moving past the野蛮生长 (wild growth) phase into the mature iteration phase. Corresponding liquidity and user stickiness will naturally follow.
Conclusion: The Crypto Industry Has Not Yet Reached the Stage of 'Relying on Talent'
Recently, Moore Threads, known as the "Chinese version of NVIDIA," successfully listed on the Hong Kong stock market, achieving a milestone of 300 billion yuan on its first day of trading; then, within just a few days, its stock price soared, reaching another astonishing breakthrough with a market cap exceeding 400 billion yuan today.
Compared to Ethereum, which took 10 years to finally reach a $300 billion market cap, Moore Threads covered 1/7 of that journey in just a few days. And compared to US stock giants with market caps in the trillions, the crypto industry is even more insignificant.
This makes us sigh again: today, with far smaller capital scale and user involvement scale than the traditional financial industry and the internet industry, we are far from the stage of "relying on talent." The only pain point of the crypto industry currently is that we don't have enough people, we don't attract enough capital, and the industries involved are not broad enough. Rather than worrying about those macro, all-encompassing "moats," perhaps what we should think about is how cryptocurrency can更快 (faster), lower cost, and more conveniently meet the real needs of more market users.








