Pride 🟠🤝

Ironically the way to express this trade (that major L1s don't have moats) is a pair trade: long emerging L1s, short the majors. That's what not having a moat actually looks like—easy encroachment by new entrants, and valuation compression among all the competitors. Even if you're bearish L1s on the whole, the pair trade will capture that. To be clear, I don't agree with this. L1s demonstrably have very strong moats—that's what we see in practice. It's on the naysayers to theorize why the future will be different from the past. Because what Qiao is describing here is what I (and many others) believed back in 2018-2019, and we have 7 years of data showing us how wrong we were. L1 moats are very deep. That's where my cities analogy came from. San Francisco, NYC are dysfunctional cities in so many ways, but their moats are seemingly uncontestable.

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