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On L1 Value Capture from Two Solana Proposals

The article, "Discussing L1 Value Capture Through Two Solana Proposals," by Max Resnick, explores how Layer 1 (L1) blockchain tokens derive their fundamental value, drawing parallels to traditional asset pricing theory. Resnick argues that L1 token value, like stock value, stems from claims on future income streams for holders, not merely from network activity or technological promise. This value is captured when fees are either burned (economically akin to a buyback) or distributed to stakers (akin to dividends). Inflationary staking rewards, by contrast, redistribute value among holders rather than creating it. The core challenge is the quality and defensibility of fee-based revenue. High-quality fees come from sustainable, recurring demand for the network's economic utility (e.g., long-term financial activity), not from transient speculation (e.g., meme coins, airdrops). The strength of a blockchain's network effects—liquidity, applications, users—can make its revenue more defensible and grant it greater pricing power than often assumed. The article proposes a foundational valuation framework for L1s, separating revenue (fees captured for token holders), costs, and total token supply. A key accounting principle is that inflationary rewards should not be counted as a cost unless the newly minted tokens are symmetrically counted as a value input; otherwise, it misrepresents profitability. Finally, Resnick discusses the economics of increasing protocol fees to boost revenue. Since revenue equals price times quantity, the net effect depends on demand elasticity. Research on Ethereum suggests transaction demand is somewhat elastic; a fee increase reduces volume. A uniform fee is a blunt instrument, as different transactions (e.g., small transfers vs. large settlements) have vastly different abilities to pay. The article suggests that transaction-value-based fees, potentially implemented via token programs, could be a more efficient way to capture value from high-willingness-to-pay activities. The discussion is framed around ongoing Solana proposals (SIMD-550, SIMD-553) but focuses on the universal principles of L1 value accrual.

marsbit08/05 07:06

On L1 Value Capture from Two Solana Proposals

marsbit08/05 07:06

Annual Salary of Millions Competing for Electricians, Meta Rushes to Open Its Own Technical School

The AI boom is facing an unexpected bottleneck: a severe shortage of skilled construction workers and electricians. As tech giants like Meta, OpenAI, and Alphabet race to build massive data centers—such as OpenAI's $16 billion "Stargate" project—they are hitting a critical labor wall. The U.S. needs an estimated 130,000 more electricians, 240,000 construction workers, and 150,000 supervisors by 2030 for AI infrastructure alone, but tens of thousands of electrician jobs go unfilled each year. While AI companies offer high premiums, with electricians earning up to $280,000 annually, worker scarcity still causes massive losses—delays on a single project can cost $14.2 million per month. The complexity of building AI data centers, which require immense power (equivalent to powering hundreds of thousands of homes), sophisticated electrical systems, and advanced liquid cooling solutions, demands highly skilled technicians who are in short supply. To combat this, companies are investing heavily in training. Meta has committed $115 million to a free training school offering tuition, housing, and stipends, targeting 5,000 new workers. OpenAI is partnering with unions to secure skilled labor. These efforts are paying off, with a significant rise in Gen Z interest in trade schools over college. However, the power demands are staggering. AI data centers are driving a rapid surge in electricity consumption, projected to account for up to 12% of U.S. power use by 2028 and raising costs for consumers. Furthermore, the construction boom is project-based, leading to a potential future glut of trained workers once building peaks, which could depress wages industry-wide. The race for AI supremacy now depends as much on skilled hands as on advanced chips.

marsbit08/03 02:21

Annual Salary of Millions Competing for Electricians, Meta Rushes to Open Its Own Technical School

marsbit08/03 02:21

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