Delphi Digital: The L1 valuation premium has disappeared, and the market demand for homogeneous infrastructure is weakening

Delphi Digital stated in a post that the valuation premium of Layer1 is disappearing, and the transition from "fat protocols" to "fat applications" has been ongoing for some time, but the market is just beginning to price this in. The demand for homogeneous infrastructure is weakening, and investor expectations have shifted.

Major public chains are under greater pressure to demonstrate real and sustainable recurring revenue. Stablecoins may be a way out, with over $30 billion of USDC and USDT already deployed across various alternative Layer1 and Layer2 networks, generating over $1 billion in revenue annually for Circle and Tether.

The ecosystem that truly drives the demand for these stablecoins has a total fee revenue of about $800 million. Many public chains have realized this and are beginning to internalize the economic benefits of stablecoins, rather than continuing to subsidize the issuers.