Once again, I am impressed by the excellent design of Bitcoin.

DeepSeek R2 did not emerge in May as rumored, but instead underwent an R1 minor update on 5.28, and Musk's Grok 3.5 has also frequently missed its deadlines, not even making a sound like a starship.

Under the fervent push of massive capital, the scaling law in the large model domain is completing its lifecycle faster than Moore's Law in chips.

If software, hardware, and even human lifespan, cities, and countries have their scale effect limits, then the blockchain domain must also have its own rules. At a time when SVM L2 is entering its token issuance cycle and Ethereum is returning to the L1 battlefield, I attempt to mimic the scaling law and provide a crypto version.

Ethereum's Soft Scale, Solana's Hard Ceiling

We start with the full node data scale.

Full nodes represent the complete "backup" of a public chain. Owning BTC/ETH/SOL does not mean we own the corresponding blockchain. Only by downloading full node data and participating in block generation can we say "I own the Bitcoin ledger", and correspondingly, Bitcoin adds a decentralized node.

Solana's 1,500 node scale struggles to balance decentralization and consensus efficiency. In contrast, its 400T full node data scale leads among public chains/L2.

Image description: Public chain full node data scale, image source: @zuoyeweb3

Without comparing to Bitcoin, Ethereum has already been excellent in controlling data volume. Since its Genesis Block on July 30, 2015, Ethereum's full node data volume is only around 13 TB, far less than its "killer" Solana's 400 TB, while Bitcoin's 643.2 GB is almost an art piece.

In the initial design, Satoshi Nakamoto strictly considered the growth curve of Moore's Law, strictly limiting Bitcoin's data growth to the hardware expansion curve. It must be said that those who later supported large Bitcoin blocks could not stand their ground, because Moore's Law has reached the edge of marginal effects.

Image description: Comparison of Bitcoin node growth and Moore's Law, image source: Bitcoin Whitepaper

In the CPU domain, Intel's 14 nm++ can be called a family heirloom. In the GPU domain, NVIDIA's 50 series has not "significantly exceeded" the 40 series. In the storage domain, under Yangtze Storage's Xtacking architecture, 3D NAND stacking scale has gradually reached its peak, with Samsung's 400 layers being the current engineering expectation.

In short, the scaling law ensures that the underlying hardware of public chains will no longer see huge improvements, and this is not a short-term technical limitation but will maintain the status quo for a considerably long time.

Facing difficulties, Ethereum is devoted to ecosystem optimization and reconstruction. The trillion-dollar RWA assets are its must-win territory. Whether imitating Sony's self-built L2 or fully embracing the Risc-V architecture, it is not about "finding more extreme software and hardware synergy" but about preserving its own advantages.

Solana chooses to pursue ultimate light speed. Beyond the current Firedancer and AlpenGlow, the extremely large node scale has effectively excluded individual participants. While a 13 TB hard drive could still be assembled, 400 TB is a pipe dream. Even the 600 GB Bitcoin would theoretically be satisfied under the constant firefighting state of Samsung, LG, and SK Hynix factories.

The only question is: where are the lower and upper limits of the chain's scale?

Token Economic System Limits

AI has not embraced Crypto as expected, but this does not prevent Virtuals' token price surge. Even with blockchain in one hand and AI in the other has become a companion of the current US government's MAGA. 5G and metaverse are already old news; the most notable figures are still Sun Yuchen and stablecoins.

We'll briefly discuss the extreme indicators of the token economic system. Bitcoin, lacking practical use, has a market cap of $2 trillion, Ethereum $300 billion, Solana $80 billion. Taking Ethereum as the standard value, the public chain economic system limit is $300 billion.

This does not mean Bitcoin is overvalued or that new public chains cannot exceed this value, but most likely, a public chain's market performance is the current optimal solution, meaning "we believe the current market performance is the most reasonable existence". Therefore, directly selecting this value is more effective than complex calculations, following Occam's razor.

We introduce two concepts from the book 'Scale':

1. Superlinear scaling: When a system's scale expands, its output or benefits do not increase proportionally but grow at a faster speed.
2. Sublinear scaling: When a system's scale expands, some of its indicators (such as cost, resource consumption, maintenance requirements) grow slower than the linear proportion.

Image description: Ethereum price trend, image source: BTC123

Understanding the two is not complex. For example, Ethereum's growth from $1 (2015) to $200 (2017) belongs to superlinear scaling, taking about half the time compared to its growth from $200 to ATH (2021), which is a classic sublinear scaling.

Everything has its limits; otherwise, blue whales, elephants, and North American redwoods would transcend themselves. But Earth's gravity is a hard ceiling, difficult to overcome.

Let's continue exploring: Has DeFi reached its limit?

DeFi's scale limit can be contained within Ethereum. Turning to examine yield, which is DeFi's core proposition and entropy increase's driving force, we provide three standards: UST's 20% APY, DAI's 150% over-collateralization ratio, and Ethena's current sUSDe 90D MA APY of 5.51%.

We can assume that DeFi's yield capture capability drops from 1.5x to 5%. Even calculating with UST's 20%, DeFi has already reached its upper limit.

Note that trillion-dollar RWA assets on-chain will only lower DeFi's average yield, not increase it, which aligns with the sublinear scaling law. The ultimate expansion of system scale does not bring ultimate capital efficiency improvement.

Also note that DAI's 150% over-collateralization ratio exists with a market motivation: I can earn additional profits beyond the 150% collateralization ratio. This is my personal view and may not necessarily be correct.

We can be blunt: the current on-chain economic system, based on token economics, has an actual scale upper limit of $300 billion, with yields around 5%. Again, this is not about the total market cap or individual token's upper or lower limits, but the total tradable scale.

In reality, you cannot sell $2 trillion of Bitcoin; even US Treasury bonds cannot absorb such a massive sell-off.

Conclusion

Looking at the blockchain development history since Bitcoin, the discrete trend between public chains has not been bridged. Bitcoin is increasingly decoupling from its on-chain ecosystem, and the failure of on-chain reputation and identity systems has made over-collateralization the mainstream.

Whether stablecoins or RWA, they are all leveraged on-chain versions of off-chain assets. Off-chain assets naturally have higher credibility. Under the current on-chain scaling law, we may have also reached the limits of scaling law or Moore's Law. It has been only 5 years since DeFi Summer and 10 years since Ethereum's birth.