Investors and industry leaders are debating whether layer one (L1) blockspace can be considered a commodity. Bitwise CIO Matt Hougan recently questioned this notion, suggesting it may be an oversimplification of the complex dynamics at play in the blockchain ecosystem.
Hougan pointed out that top-tier networks have built excess capacity to accommodate growing usage, which has kept fees low despite increasing demand. However, he noted that if stablecoins and decentralized finance (DeFi) scale dramatically as projected, the supply-demand balance may shift, potentially leading to higher fees and a reevaluation of blockspace.
The debate surrounding L1 commoditization is ongoing, with some arguing that network effects will maintain dominance among top chains while others believe that forkable abundance will keep competition intense. The role of rollups in reducing direct fee pressure on base layers is also being discussed, as well as the potential for a multi-chain future facilitated by interoperability protocols.