Unchained Podcast: The Chopping Block - "Web3 Dies, L1 Valuations Clash & Crypto Burnout" (Ep. 977)

Date: December 11, 2025
Host: Laura Shin
Panel: Haseeb Qureshi, Tom Schmidt, Robert Leshner, Tarun Chitra

Episode Overview

This episode of The Chopping Block dives deeply into three main topics shaping the current crypto landscape: the supposed death of Web3 (especially as defined by A16Z), the ongoing debate about fair Layer 1 blockchain valuations, and the growing sense of burnout and disillusionment among long-term crypto builders. The panel provides a raw, honest, and insider's perspective, combining industry critique, market analysis, and personal reflection on what's working, what's not, and what's next for crypto.

Key Discussion Points

1. The "Death" of Web3 and the Farcaster Pivot

• [00:00–04:32] Opening: Is Web3 Dead?
  • Tarun bluntly claims: "I think this is the end of Web3. I think Web3, as per A16Z's definition, is dead." ([00:00], [06:12])
  • The panel discusses Farcaster's strategic shift from decentralized social to wallet infrastructure, reflecting the broader challenge for non-financial crypto applications.

What Happened With Farcaster?

• [02:10] Haseeb summarizes Farcaster's slow social user growth (~25–30k DAUs), stalls with "crypto insider" adoption, and their pivot towards wallet tooling.
• [03:30] Others note similar struggles on Bluesky, reinforcing doubts about the viability of "crypto social" without a financial core.
• [05:40] Robert’s view: There’s no winner yet—social+crypto could eventually succeed, but none have cracked it.
  • Quote: "I just think that nobody has really figured it out yet. I think there will be someone who inevitably cracks it. It's just hard." — Robert [04:47]

Why Didn't Crypto Social Work?

• [05:50–10:37] Tarun speculates that new crypto "social" efforts simply cloned Twitter with marginal tweaks, failed to innovate on UX, and devolved into airdrop-hunting, spam, and lack of mainstream appeal.
  • Quote: "No one gave a shit about owning their own posts." — Tarun [07:49]
• D highlights that crypto social tools proved harder to bootstrap and monetize without "real" financial incentives.
• The spammy, airdrop-driven incentive model undermined organic growth.

Is There a Future for Crypto Social?

• [11:48–13:56] There's respect for Farcaster's decision to refocus, seen as responsible product management rather than just failure.
  • Quote: "Props to them for making a tough decision... I think more teams in this space should have that discipline." — Tom [10:53]
• Tom and the group agree that future breakthroughs (if any) will likely look totally different—maybe prediction markets or other financialized social formats.
• Prediction markets (e.g. Polymarket, Kalshi) are cited as emergent "social networks" because their activity creates a new form of social content and engagement.
  • Quote: "Prediction markets are the thing that is the new modality of social network." — Tarun [07:01]
  • [21:06] Tom paints a picture of everyone chatting and betting at real-world events as a "social network."

2. Layer 1 Valuation Wars

• [24:25] The group recaps a high-profile debate on whether Layer 1 (L1) tokens like Ethereum and Solana are dramatically overvalued, with Haseeb defending "exponential" valuation logic and others (like Santiago from Inversion) emphasizing high, unjustifiable PE ratios.

Should L1s Be Valued Like Startups, Commodities, or Equities?

• [27:09–29:53] Robert outlines the key issue: constant competition means the total market cap "pie" may be right-sized, but the value captured by any given L1 is fragile—future entrants can erode incumbents. "Competition's never going to end."
  • Quote: "The total pie is probably correct... but the current crop should potentially be worth less relative to the future." — Robert [29:53]

Do All L1s Deserve Their Current Prices?

• [30:47–32:28] Robert suggests halving the aggregate L1 market cap—"knock 50% off."
• [33:30–35:09] Tarun questions whether value will concentrate in a few big winners or be distributed; new chains have higher and higher hurdles to overcome.
  • Quote: "There's a cost for each new L1. The cost to catch up is worse when they're the Nth L1." — Tarun [33:47]
• [35:09] Tom notes market preference for legacy chains—even as new, well-funded L1s can't gain traction.
  • "You can have the same product but if it's a chain, it gets some other property... now we give it a 10x multiple." — Tom [34:48]

The L1 Value Drivers

• [35:50–37:46] Haseeb outlines that L1 tokens will ultimately behave as equities reflecting the chain’s cash flows, not as commodities.
  • Quote: "Most of the demand for Ether comes from the chain’s equity-like fee structure… not from commodity or monetary usage." — Haseeb [36:19]
• [37:46] The prevailing thesis: if blockchains genuinely eat large fractions of global finance, L1 valuations make more sense.

The Role of Global Markets & Narrative Valuation

• [38:28] Tarun suggests L1 valuations are still heavily trader- and narrative-driven, citing regional flows (e.g. traders in Korea, Turkey).
• [39:22] Relative market performance: Ether holds up better than other alts, perhaps giving some credence to fundamentals.

3. Crypto Burnout & Existential Angst

• [39:22–41:42] The viral "I Wasted Eight Years in Crypto" post by Ken Chan sparks introspection about the builder experience and the darker side of the industry for founders.

Is Crypto Just Casino Building?

• [41:42] Ken’s disappointment: the ecosystem rewards speculation (casinos, memes, NFTs) over "real things." Many founders pivot to high-velocity financialization or burn out.

• [44:46] Tom: "I think one of the most painful paths for founders is seeing someone else lap you… you feel entitled to the crown because you were there first."

• [45:46] Haseeb and the group discuss the difficulty of "missing" despite being early, expressing empathy and noting it’s especially hard in winner-take-all markets.

• [46:03] Robert divides crypto into “sugar water” (reinventing incentives to create perpetual motion) and truly transformative use cases.

  • Quote: "There's two types of crypto. There's sugar water crypto, and there's build real things crypto." — Robert [46:03]

• He identifies a wide-open opportunity space; people can and should seek new "corners" or leave if burned out.

  • "It’s very easy to get bored of one thing and find excitement in another corner of it." — Robert [47:25]

Finding Motivation amid Burnout

• [49:10–50:49] Robert points out the once-in-a-lifetime chance to invent on top of a truly new infrastructure—just as people did with the Internet in the '90s.
  • Quote: "If you're not in crypto yet, come in now. It's a great time to build." — Robert [50:49]

4. Technical Deep Dive: Auto-Deleveraging (ADL) on Perp DEXs

• [51:02] Tarun shares research on how ADL mechanisms (which manage risks when there isn't enough liquidity to close a position on margin) can be improved to save potentially hundreds of millions during volatile events (like the October 10th cascade).
  • Quote: "Empirically, it seems like you could have saved hundreds of millions of dollars on October 10th." — Tarun [52:42]
• Transparency and open data enable these innovations—ironically, the "sugar water" environment is also ripe for technical breakthroughs.
• Robert: "That's the stuff in crypto that motivates me—you can find these crazy things." [53:44]

Notable Quotes & Moments

• [07:49] Tarun: "No one gave a shit about owning their own posts."
• [21:06] Tom: "The future is you go to the high school basketball game and the prediction market app... all the people in the stands with you are like chatting and betting on the game."
• [29:53] Robert: "Competition's never going to end... that's why I think the current crop should potentially be worth less relative to the future."
• [36:19] Haseeb: "Most of the demand for Ether comes from the chain’s equity-like fee structure… not from commodity or monetary usage."
• [46:03] Robert: "There's two types of crypto. There's sugar water crypto, and there's build real things crypto."
• [50:49] Robert: "If you're not in crypto yet, come in now. It's a great time to build."
• [52:42] Tarun: "You could have saved hundreds of millions of dollars on October 10th [with better ADL]."

Timestamps for Important Segments

• 00:00 – Is Web3 Dead?
• 05:40 – The Failure of Crypto Social Apps
• 09:37 – Farcaster's Pivot & Industry Response
• 19:00 – Revealed Preferences & Social App Inconvenience
• 24:25 – L1 Valuation Debate Intro
• 29:53 – Robert: Pie is Correct, but Competition Will Dilute Incumbents
• 35:50 – How L1s Capture Value: Commodity, Equity, or Meme?
• 39:22 – L1 Valuations & Market Sentiment
• 41:42 – Crypto Burnout Discussion
• 46:03 – Sugar Water vs. Building Real Things in Crypto
• 50:49 – The "Right Time to Build" in Crypto
• 51:24 – Tarun on ADL (Deleveraging) Research

Tone and Style

The episode is candid, critical, and full of dry industry wit. The speakers don’t shy from calling out what they see as "bullshit," openly discuss mistakes, and offer sober, pragmatic advice. Despite disappointment with past narratives, there's still optimism about technical progress and new experiments at the margins.

Conclusion

This episode is a must-listen for anyone interested in the intersection of crypto technology, product-market fit, and founder psychology. It offers hard-won lessons about what has—and hasn’t—worked in Web3, thoughtful analysis of Layer 1 token value, and a refreshingly frank take on burnout and building things that matter.

For more in-depth analysis, check The Chopping Block at ShoppingBlock.xyz.