Bitwise CIO Matt Hougan says the concept that layer 1 blockspace has change into a commodity could also be untimely, arguing that the group’s actions inform a really completely different story.
Hogan pushed again on what he stated: “There’s a rising view within the crypto world that L1 blockspace is a commodity.”
Institutional capital might be concentrated in top-tier chains as on-chain prediction markets redefine the data edge
Bitwise executives say that when infrastructure turns into really commoditized, capital and improvement might be distributed evenly throughout the chain.
As a substitute, many of the establishment constructing is occurring on a really small variety of chains (Ethereum, Solana, and so forth.).
“…We mainly have little interest in constructing on high of L1, which is the twentieth largest,” he defined.
Networks like Ethereum and Solana proceed to dominate mindshare, liquidity, and developer exercise, at the same time as new layer 1s compete fiercely for charges and throughput. Mr. Hogan supplied a extra simplistic rationalization of at present’s low-cost surroundings.
“High-tier L1 is constructing out extra bandwidth than the market presently has out there, so costs are on the lowest ranges.”
However he warned that the present equilibrium could not final.
“The true query is what occurs when demand grows as stablecoins/tokenization/DeFi grows into the trillions,” he wrote. “I do not know the reply to that but.”
As blockchain-based monetary infrastructure expands to help trillions of {dollars} of tokenized belongings and on-chain funds, the present extra capability might shortly change into strained. Such an end result might reshape the financial construction of key networks.
Hogan claims that prediction markets are “regulated FD for the Web age”
Past infrastructure, Hogan additionally touched on one other controversial subject: insider buying and selling considerations surrounding crypto-based prediction markets.
“The insider buying and selling considerations concerning prediction markets are essentially backwards,” he wrote. “Prediction markets are a market-based extension of Reg FD that places us all on a stage enjoying subject.”
Regulation Truthful Disclosure (Reg FD) is designed to forestall selective disclosure of fabric data to advantaged traders.
Hogan argues that prediction markets prolong that precept by publicly pricing the possibilities of main occasions.
He recalled that hedge funds have traditionally extracted “alpha” by hiring lobbyists and consultants to collect personal data from Capitol Hill throughout key legislative moments in Washington, D.C.
The view I take right here is that robust traders all the time have an enormous benefit.
I used to be reflecting on this over the weekend, fascinated by how typically I see polymarkets surrounding the passage of the Readability Act.
Prior to now, when D.C. enacted essential laws, corresponding to…
— Matt Hougan (@Matt_Hougan) February 22, 2026
However now, retail traders can monitor stay possibilities on platforms like Polymarket, together with markets associated to the probability of passage of laws just like the Readability Act.
“For a liquid market, these odds are most likely nearly as good or higher than what lobbying teams can supply. It is a extra stage enjoying subject,” Hogan stated.
He acknowledged that dangers stay and cited the necessity to aggressively crack down on insider buying and selling in prediction markets. Nonetheless, he careworn that the stability of affect is dramatically constructive and egalitarian.
So there are two arguments right here.
- whether or not L1 is commoditized;
- Whether or not prediction markets present an unfair benefit
Each arguments revolve round how energy is distributed within the monetary system. Matt Hogan says the focus of establishments in top-tier chains displays financial realities reasonably than pure commoditization.
Then again, open prediction markets are a uncommon instance the place data asymmetry may very well be reducing.
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