From Cities to Ecosystem-Societies: A Framework For Evaluating L1 Ecosystems

Understanding L1 Ecosystems Through Urban Planning

Layer 1 blockchains are more than technical infrastructure – they're digital cities with their own economies, cultures, and governance systems. This framework helps evaluate L1 ecosystems through the lens of urban development.

The City Metaphor

Just as cities compete for residents and businesses, L1s compete for developers and users. The most successful cities (and L1s) offer:

• Infrastructure: Roads (throughput), utilities (tooling), public services (core protocols)
• Economy: Job opportunities (yield), businesses (dApps), financial services (DeFi)
• Culture: Community values, aesthetic preferences, social norms
• Governance: Decision-making processes, upgrade mechanisms, dispute resolution

Evaluation Framework

When evaluating L1 ecosystems, we consider:

1. Developer Experience: How easy is it to build and deploy?
2. User Experience: How accessible is the ecosystem to end users?
3. Economic Sustainability: Are there sustainable fee models and value accrual?
4. Network Effects: How do applications and users reinforce each other?
5. Differentiation: What unique value does this ecosystem provide?

Investment Implications

This framework guides our infrastructure investments. We look for L1s that aren't just technically superior, but are building sustainable ecosystem-societies with clear paths to adoption and growth.