The Exponent Is Real — But So Is Gravity

The internet didn’t die. The dot-com valuations did. Optimism makes money. Skepticism keeps you alive long enough to make it.

Crypto has always loved a good narrative. But lately, it feels like we’ve crossed into a new phase of epistemic chaos—a world where asking basic questions is treated like betrayal.

If you dare say things like:

• “Does this thing make money?”

• “What supports a $40B valuation?”

…you’re instantly labeled a pessimist, a boomer, or—worst of all—a mid-curve enjoyer.

Somehow, skepticism = pessimism, and fundamentals = cynicism. Bring up cash flows and people act like you’ve committed heresy. The vibe is: stop thinking and just believe.

Haseeb wrote a strong post defending belief in the exponent.

This is my response.

But before diving in, let’s set the record straight:

I’ve staked my career—and an irresponsible chunk of my net worth—on the frontier. I’m not anti-exponent. I’m anti-delusion.

Crypto doesn’t need less skepticism.

It needs more qualified skepticism.

---

I Believe in the Exponent — But I Also Believe in Survival

• I believe in the exponent.

• I believe in technology.

• I believe we chronically underestimate 10-year trajectories.

• And I’ve put more on the line than most.

I’ve lived every phase of this industry — from being one of its earliest and most active angels to now building Inversion, a PE-deployer fund aimed at bringing real, sustainable economic activity onchain.

I’m not here to dunk on crypto.

I’m here because I care about where it’s going.

So no—I’m not “missing the big picture.”

What I am doing is something crypto desperately needs more of:

“Great investors re-underwrite constantly. Great investors hold conflicting ideas. Great investors are optimistic and skeptical.”

Techno-optimism without skepticism isn’t vision—it’s suicide.

Too early is the same as wrong unless you survive long enough to be right.

---

The Amazon Analogy: Great Story, Bad Analytics

Haseeb’s Amazon analogy is seductive.

Exponential curves look flat until they explode. Wall Street doubted Bezos. Optimists won.

All true.

But the way this story gets interpreted in crypto is wrong. Because charts lie when you don’t scale them correctly.

Early differences? Invisible.

Later differences? Astronomical.

Here’s the key:

“Normalize via log scale—or even just use a proper secondary axis—and suddenly Amazon looks like what it actually was.”

A well-run, customer-obsessed compounding machine—not a 22-year profitless science experiment.

And yes, the chart used in Haseeb’s piece (via Benedict Evans) puts revenue and net income on the same axis:

That completely distorts the picture.

“It’s a rookie mistake—a great storytelling device for VC Twitter, but it doesn’t survive Wall Street scrutiny.”

And to be fair, most crypto VCs aren’t exactly poring over 10-Ks.

If you’ve never had to analyze a real P&L, a revenue line and a net income line on the same axis doesn’t register as a problem.

But Amazon’s early profitability isn’t a footnote—it destroys the core premise of the analogy.

Here are the actual facts:

• Founded: 1994

• IPO: 1997

• First profitable year: 2003

• Profitable in 22 of its last 28 years

• Post-dot-com P/S: 2–4×

• Peak bubble P/S: 28× (in 1998)

Translation:

“Amazon was expensive because it was good—not good because it was expensive.”

Meanwhile in crypto:

• $4B valuation + $0 revenue

• $400B valuation + $1B revenue

• +50× P/S multiples on L1s

• “Bro, TAM is trillions, just believe.”

Sorry, but:

“Amazon never traded like a dream with no revenue or profitability. Crypto does constantly.”

This is not fud.

This is arithmetic.

---

Where the Amazon Analogy Falls Apart for L1s

Amazon is 1/n. It got almost everything right.

Crypto L1s?

They have inverse moats:

• Attract developers… but don’t retain them

• Attract liquidity… but can’t keep it

• Open source… great for innovation, terrible for margins

• Blockspace… structurally a commodity

• Users… mercenary

• Switching costs… effectively zero

We love talking about “cities,” “credible neutrality,” “digital nations,” but the truth is:

“Crypto L1s resemble bazaars, not fortresses.”

And now we’re entering a massive unbundling phase:

• Klarna launching a stablecoin

• Stripe launching its own L1 (Tempo)

• JPMorgan deploying on Base

• Enterprises experimenting with every permutation of infrastructure

• Stablecoin issuer fees going to zero

Everyone wants to be infrastructure.

And each entrant erodes whatever moat L1s pretend to have.

Infrastructure is invisible.

“When everyone is infrastructure, no one earns infrastructure margins.”

Invisible things don’t retain value unless they capture users.

L1s don’t.

And here’s the core value capture problem:

“Open wins the adoption war but loses the value capture war. Abundance collapses pricing power.”

---

The Frontier Is Moving: Apps, Not L1s, Will Capture the Value

Crypto hates this idea because the last decade rewarded:

• buying <$100M infra tokens

• letting beta do the work

• calling it “liquid venture”

• pretending spray-and-pray was a strategy

But that world is gone.

We’re now in the deployment phase, where winners look like actual businesses:

---

Ethena ($ENA)

• ~$500M LTM revenue

• $2B Mkt Cap ($4B FDV)

• 4× P/S (8× FDV)

• Hyper-scaling onchain credit fund

Hyperliquid ($HYPE)

• ~$800M LTM revenue

• $9B Mkt Cap ($34B FDV)

• 11× P/S (42× FDV)

• Onchain CEX with real PMF

These look like companies—not ideas.

Now compare L1 valuations to Amazon at equivalent sizes:

---

Ethereum ($ETH) — $361B valuation

• ~$1B annual revenue

• 361× P/S

Amazon, at the same valuation, generated ~$136B in revenue and ~$2.4B in net income — a 2.6× P/S.

Ethereum investors are paying ~136× more for each dollar of revenue than Amazon investors did.

---

Solana ($SOL) — $85B valuation

• ~$1.7B annual revenue

• 50× P/S

Amazon, at an $85B valuation, generated ~$50B in revenue and ~$600M in net income — a 1.7× P/S.

Solana investors are paying ~30× more for each dollar of revenue than Amazon investors did.

---

Let’s not kid ourselves:

“Amazon and AI are fairly valued. Crypto is not.”

L1s might deserve AWS-like multiples someday.

Today they look like organisms growing faster than their metabolic systems.

As Geoffrey West puts it:

“Systems that grow too fast without metabolizing collapse.”

Crypto keeps absorbing calories (capital) without developing the organs required to process them: revenue, retention, pricing power, and sustainable recurring demand.

---

Believe in the Exponent — But Don’t Die Before It Pays Off

This isn’t bearishness.

I’m irresponsibly long crypto and have been for a decade.

This is about survival.

• The internet didn’t die.

• The dot-com valuations did.

Crypto will rhyme.

And here’s the irony:

“Investing in Amazon in 2001, 2011, and 2016 was life-changing because it was priced fairly.”

Crypto today prices everything like it’s already AWS 2.0, while generating Shopify-level revenue (on a good day).

Optimism makes money.

Skepticism keeps you alive long enough to make it.

And if being “mid-curve” means wondering why a $40B token is pulling in the revenue of a suburban Jamba Juice… then so be it.

---

Final Thought

He who controls the user controls the universe.

Crypto infrastructure does not control the user.

Stripe does.

JPMorgan does.

BlackRock does.

These giants will deploy on open infra—just like they did with the internet.

But they will capture the value.

Not generalized L1s selling commoditized blockspace.

So yes:

Believe in the exponent.

Believe in the future.

But stay skeptical enough to survive it.

That’s not mid-curve.

That’s just good investing.

---

If This Resonated…

I’m continuing this series on how fundamentals actually apply to crypto—without losing sight of the exponent.

Subscribe to stay ahead of the curve—mid, high, and otherwise.