Zcash News Today: Crypto’s Schism: Doubt in L1s Contrasted with Growth at the Application Layer
- QwQiao critiques speculative L1 tokens (e.g., Bitcoin , Ethereum) for scalability issues and volatile valuations, contrasting them with utility-driven application-layer innovations. - Application-layer projects like DeFi, NFTs, and privacy-focused Zcash (ZEC) gain traction via real-world use cases, exemplified by Grayscale's ZEC ETF and Bitcoin Munari's structured token sales. - Dynamic tokenomics and institutional adoption (e.g., Ripple's RLUSD approval) highlight shifting priorities toward sustainable
Shifting Perspectives in Blockchain: From Layer 1 Tokens to Application-Layer Innovation
Recent insights from QwQiao highlight a growing doubt surrounding Layer 1 (L1) blockchain tokens, which have traditionally held a central role in the cryptocurrency sector. The analysis points to a changing landscape, where attention is moving away from speculative L1 assets and toward the practical promise of application-layer advancements.
While foundational protocols like Bitcoin and Ethereum continue to provide essential security and decentralization, they are frequently criticized for ongoing issues with scalability and high transaction costs. Industry experts note that these challenges have prompted a reevaluation of where true value lies within the blockchain ecosystem.
Application-layer solutions—spanning decentralized finance (DeFi), non-fungible tokens (NFTs), and interoperability platforms—are increasingly recognized as the driving force behind broader adoption. These innovations are seen as more capable of delivering real-world benefits and attracting mainstream users.
Market Volatility and the Limits of L1 Tokens
Recent market events have exposed the vulnerabilities of L1 tokens. For instance, Hyperliquid's HYPE token experienced a dramatic 54% drop in a single day during the October 2025 downturn, despite the platform maintaining a substantial monthly trading volume of $330 billion. This sharp fluctuation underscores the speculative nature of many L1 assets, which often lack sustainable revenue models and rely heavily on market sentiment.
QwQiao's report, echoing the views of other analysts, points out that L1 tokens often struggle to justify their market value when their primary functions are limited to transaction processing and governance, without generating consistent income streams.
Application-Layer Projects: Real-World Impact and Growing Demand
In contrast, projects operating at the application layer are gaining momentum by addressing tangible needs. A notable example is Grayscale's recent application for a Zcash (ZEC) ETF, reflecting a surge in institutional interest in privacy-focused digital assets. Zcash itself has seen its value soar by over 1,000% this year, fueled by demand for secure and confidential transactions.
These developments demonstrate how application-layer projects are fostering organic demand by offering practical features like enhanced privacy, interoperability across blockchains, and user-oriented financial services.
Rethinking Token Economics
The critique of L1 tokens extends to their economic frameworks. Adaptive tokenomics—systems that dynamically adjust supply, emissions, and fee allocation—are emerging as a response to the inflexible models of many L1 protocols. Projects such as BASE are experimenting with advanced governance mechanisms, including machine learning and vote-escrowed tokens (veBASE), to better align incentives and promote sustainable ecosystem growth. This stands in stark contrast to traditional L1 models, which often focus on extracting short-term liquidity rather than building lasting value.
The Road Ahead: Infrastructure and Institutional Momentum
Looking forward, the expansion of application-layer solutions is expected to accelerate as blockchain infrastructure continues to evolve. The recent approval of Ripple's RLUSD stablecoin in Abu Dhabi and the rise of Layer 3 technologies—such as DeFi platforms and NFT marketplaces—highlight the sector's increasing vitality. Industry reports also point to growing institutional participation, with products like Grayscale's ZEC ETF signaling a shift toward crypto assets that offer practical utility.
As the blockchain industry navigates regulatory complexities and technical challenges, the gap between speculative L1 tokens and utility-focused application-layer projects is likely to widen. QwQiao's analysis serves as a timely reminder that lasting value in the crypto space depends on bridging the divide between robust infrastructure and solutions that meet real user needs.
Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.
You may also like
Hayes' Influence on DeFi Liquidity Fluctuations Drives Market Sentiment and Fuels Discussion
- Arthur Hayes, ex-BitMEX CEO, intensifies DeFi activity via strategic ENA , PENDLE, and ETHFI transactions, shaping liquidity dynamics. - On-chain analytics reveal $1.42M diversified portfolio acquisitions from Cumberland , reflecting risk management in yield-generating assets. - High-profile trades, including $245K ENA purchase post-$1.38M liquidation, influence short-term price volatility and market sentiment. - Analysts view Hayes' movements as a DeFi confidence barometer, though caution against overin

Bitcoin Updates Today: Technical Optimism and Institutional Interest Face Off Against Broader Economic Challenges
- Bitcoin hovers near key Fibonacci support amid volatility, with technical indicators showing neutral RSI and bullish MACD but bearish EMA resistance. - Nasdaq proposes raising IBIT options limits to 1M contracts, signaling institutional confidence as BlackRock's ETF gains traction and holders turn profitable. - Krugman links Bitcoin's 30% drop to waning Trump support, contrasting technical optimism while Tom Lee revises $250k target to cautious $100k threshold. - XRP stagnates below $2.30 despite UAE reg

Textbook Liquidation: Monero Whale Faces $1.9M Loss in Leverage Trade
- A Monero whale's 3× leveraged $5.6M long position was liquidated at $0.02298, resulting in a $1.9M loss amid volatile price swings. - The trader initially gained $654K as MON surged but faced rapid reversal, highlighting risks of overleveraging in low-liquidity altcoins. - Analysts warn such high-risk strategies amplify both gains and losses, with liquidation margins often razor-thin in speculative crypto markets. - The event sparked mixed market reactions, with some viewing it as a cautionary tale while

Bitcoin News Today: BlackRock's ETFs: Institutional Embrace of Bitcoin Drives $245 Million in Revenue
- BlackRock's Bitcoin ETF (IBIT) drove $42.8M inflows on Nov 27, stabilizing BTC's $90K rebound amid macroeconomic uncertainty. - ETFs now hold 3% of Bitcoin's supply and $18.88B in ETH assets, shifting institutional focus from speculation to long-term accumulation. - Grayscale's Zcash ETF filing highlights growing altcoin demand, with ZEC surging 500% in two months amid privacy token trends. - Nasdaq's proposed IBIT options expansion to 1M contracts would align the ETF with major benchmarks like SPY, refl
