Crypto network effects spark debate as investors question layer 1 valuations

Santos claims cryptocurrencies are not benefiting from positive network effects and states that their pricing does not align with Metcalfe’s Law, highlighting the negative impacts like congestion and poor user experience.

Contrasting experts argue that Layer 1 blockchains possess relevant network effects at the infrastructure level and warn against applying consumer-focused logic to assess these networks, emphasizing the importance of liquidity and security.