Grayscale Investments: ‘Ethereum Is Like New York City’
Categories: Crypto News
In a recent report titled “Get Smart on Smart Contract Platforms”, cryptoasset manager Grayscale Investments compared Ethereum to New York City.Grayscale’s report, which was published last month, said that Dragonfly Research had “pioneered a useful framework for understanding blockchains by comparing blockchains to cities, the thesis being that blockchains are similar to cities in that each chain is a physically constrained network that prioritizes different features.”
Grayscale was referring to a Medium blog post by Dragonfly Research that was published on January 18. In the Dragonfly report, Haseeb Qureshi said that although “People usually describe L1 blockchains as networks,” networks are “the wrong analogy for blockchains” since “blockchains are physically constrained.”Qureshi went on to say that in fact “smart contract chains are more like cities.” He then explained that under this framework, you could say that Ethereum is New York City:“Sure, New York is a happening place! It has all the biggest banks, the most billionaires, the hottest brands and celebrities. In the same way, Ethereum has all the biggest DeFi protocols, the most TVL, the hottest DAOs and NFTs.
“Ethereum is like New York City: it is vast, expensive, and congested in certain areas. However, it also features the richest application ecosystem, with over 500 apps that command a total value of over $100 billion—more than 10x larger than any other competing network.“While using the network is expensive, users and developers take comfort that Ethereum will likely continue to be the center of gravity for application innovation and liquidity due to the size of its community and the amount of capital locked into the network’s smart contracts.