Ethereum News Today: Hayes: Most L1s Are Fragile, Only Ethereum and Solana Will Endure

Arthur Hayes Warns of Looming Collapse for Most Layer-1 Blockchains

Arthur Hayes, former CEO of BitMEX and a well-known voice in the cryptocurrency space, has cautioned that the majority of layer-1 (L1) blockchain networks—apart from Ethereum and Solana—are at risk of losing significant value. In recent interviews, Hayes asserted that most new L1 projects lack the necessary utility, user base, and robust design to endure through extended market cycles. He has specifically criticized projects such as Monad, highlighting broader concerns about the current state of the crypto sector.

His warnings come during a period of heightened speculation around emerging L1 platforms, with Monad drawing particular attention after its mainnet debut on November 24. The platform’s native token, MON, surged by 19% following an airdrop, peaking at $0.042. Despite this, Hayes dismissed the price increase as short-lived hype rather than genuine demand. He took issue with Monad’s tokenomics, describing it as heavily influenced by insiders, featuring a high fully diluted valuation (FDV) and a limited circulating supply. Hayes cautioned that such a structure could result in a dramatic price drop—potentially as much as 99%—once early backers are able to sell their tokens. This skepticism extends to other projects with similar high-FDV, low-liquidity models, which he believes pose substantial risks to everyday investors.

Ethereum and Solana: The Standouts

Hayes singled out Ethereum and Solana as the only L1 blockchains with a realistic chance of maintaining long-term significance. He pointed to Ethereum’s appeal among institutional investors and its modular approach, which leverages Layer 2 solutions for scalability. In contrast, Solana’s emphasis on transaction speed and low fees has attracted both retail and institutional participants. Hayes noted that while Ethereum’s ecosystem is distributed across Layer 2 networks like Arbitrum and Optimism, Solana’s robust on-chain activity—evidenced by a 186% increase in annual revenue—positions it as a formidable player looking ahead to 2026.

Rising Interest in Privacy Coins

Looking beyond L1 blockchains, Hayes expressed a positive outlook on privacy-focused cryptocurrencies, especially Zcash (ZEC). He revealed that Zcash is now the second-largest holding in his family office, Maelstrom. The recent move by Grayscale to seek ETF status for its Zcash Trust highlights growing institutional interest in privacy assets. Hayes believes that as global liquidity expands—driven by monetary policies in the United States and China—privacy technologies will see renewed momentum. He also challenged the idea that Bitcoin’s halving events are the main drivers of market cycles, instead attributing past bull markets to periods of synchronized credit growth.

Industry Outlook: Consolidation Ahead

Hayes’s critical perspective on most L1 projects reflects a wider debate within the crypto industry about the long-term viability of new blockchain networks. While some, like Monad, aim to innovate with fast execution and compatibility with Ethereum, skeptics argue that widespread adoption and developer engagement remain limited. As the market evolves, Hayes anticipates a phase of consolidation, with only a select few networks—namely Bitcoin, Ethereum, Solana, and Zcash—emerging as dominant players.