1/ Why @megaeth 's economics will be much better other L1, and even L2s? A short thread on MegaETH economics: 🧵

2/ First of all, we need to understand how chains generate revenue and where they spend it. Historically, the only way for chains to make money was by selling blockspace. For example, Ethereum has already made billions of dollars from selling blockspace and continues to do so.

3/ Some chains generate revenue through their own platforms (like Hyperliquid), but there are only a few examples of this. So, their business models generally rely on either selling blockspace or monetizing their products. However, the cost of maintaining a chain is high.

4/ Those alternative L1s need to pay for their own security, provide incentives to keep their ecosystems active, and hire large engineering teams to build new features on their chains. These expenses cost those chains billions of dollars. MegaETH is different.

5/ Currently, stablecoin issuers generate billions of dollars in revenue, and almost none of that is shared with the chains they operate on. For example, there are around $170B worth of stablecoins on Ethereum, yet none of them contribute to Ethereum’s revenue.

6/ If they did, it could add $6–7B in revenue for Ethereum. But MegaETH is different. MegaETH has partnered with Ethena to launch an ecosystem-aligned stablecoin. They’ll earn yield from the mUSD sitting on the L2 -> generate extra revenue -> use for buybacks -> more incentives

7/ Given that there was $1.4B in demand for their ICO, they can easily design an incentive mechanism where users earn via Mega incentives, while chain earns from both blockspace and the stablecoin supply on their network. Mega will function as banks: more AUM -> more revenue.

8/ Imagine they reach a $10B supply for mUSD. That alone could generate around $400M in revenue from their stablecoin. And if you compare that revenue to their valuation, it becomes clear why everyone is so hyped about their potential.

9 / Historically, almost all ecosystems have spent their token incentives on projects that don’t generate real revenue for the platform. But I feel the Mega team has a genuine chance to change this. I hope they succeed, because it would be a net positive for our industry