Bitwise CIO Matt Hougan Challenges the 'Commodity Blockspace' Thesis

Ethereum controls roughly 60% of real-world asset ( RWA) tokenization today, but Bitwise CIO Matt Hougan questions whether layer one (L1) blockspace is truly the commodity many investors assume it to be.

Bitwise CIO: We Don’t Yet Know What Happens When Crypto Scales to Trillions

In a recent post on X, Matt Hougan challenged the prevailing narrative that L1 blockspace behaves like interchangeable infrastructure. While transaction fees remain low across major networks, he suggested that today’s pricing environment may reflect excess capacity — not permanent commoditization.

“There’s an increasing view in crypto that L1 blockspace is a commodity. I wonder if that’s wrong,” Hougan wrote.

He continued:

“Infrastructure will be commoditized if it’s a commodity. But that’s not actually the behavior we’re seeing with Layer 1s right now. Instead, we’re seeing the vast majority of institutional building taking place on very few chains (Ethereum, Solana, etc.) with basically zero interest in building on the twentieth largest L1.”

A simpler explanation, Hougan added, is that top-tier networks simply built more bandwidth than the market currently needs. That overbuild keeps fees near historic lows. “The real question is what happens when demand scales as stablecoins/tokenization/ DeFi grow into the trillions. I’m not sure we know the answer yet.”

Ethereum’s Lead in RWAs

By most measures, Ethereum dominates tokenized real-world assets ( RWAs), including U.S. Treasuries, private credit and tokenized funds. RWA data from rwa.xyz estimate Ethereum holds about 60% to 70% of non- stablecoin RWA value, far ahead of rivals.

Solana and BNB Chain follow with smaller but meaningful shares, generally estimated between 10% and 20% combined. Smaller L1 networks capture negligible institutional activity, often due to thinner liquidity, fewer integrations, and much weaker developer ecosystems.

Institutional issuers tend to prefer the chains with the deepest tooling, strongest security track records, and most established liquidity. In practice, that means Ethereum first, with Solana and BNB Chain competing for specific niches.

Why Fees Remain Low

Transaction costs across major chains remain modest. Ethereum fees often range between a few cents and around a dollar, depending on activity, while Solana and BNB Chain frequently process transactions for fractions of a cent.

The reason is not necessarily infinite efficiency. Rather, top chains expanded throughput through upgrades and scaling strategies. Ethereum’s rollup-centric roadmap pushed much activity to layer two ( L2) networks, while Solana increased raw throughput and optimized execution. In short: supply of blockspace currently exceeds demand.

That imbalance keeps fees subdued. But if stablecoins and decentralized finance ( defi) scale dramatically, that equation could shift.

Stablecoins and DeFi: Trillions by 2030?

Stablecoins already represent more than $300 billion in market capitalization. Several forecasts project that figure could approach $2 trillion to $4 trillion by 2030, depending on regulatory clarity and institutional adoption.

Meanwhile, DeFi total value locked (TVL) sits under a hundred billion today, at $96.3 billion to be exact. Bullish projections envision $1 trillion to $2 trillion in locked value later this decade, especially if tokenized RWAs integrate widely into traditional capital markets.

If those estimates materialize, blockspace demand could multiply. Higher transaction volume, more settlement activity and heavier compliance tooling could all increase load on base layers. That scenario challenges the notion that L1 capacity will always remain abundant and inexpensive.

Network Effects vs. Forkable Abundance

Reactions to Hougan’s comments reveal a clear divide.

One camp argues that network effects are already decisive. Liquidity clusters around leading chains. Developers build where users are. Institutions follow security, composability and regulatory familiarity. Under that view, Ethereum and a handful of peers could maintain pricing power if demand tightens.

Another camp insists blockspace is inherently forkable and competitive. If fees rise meaningfully on one chain, developers can migrate to alternatives or deploy rollups that reduce base-layer congestion. In that scenario, blockspace remains structurally abundant.

Rollups complicate the equation. By moving activity off mainnets and settling in compressed batches, they reduce direct fee pressure on base layers. If most consumer-facing activity occurs on layer two ( L2) networks, L1 scarcity may never fully materialize.

The Chainlink Angle

One respondent to Hougan’s X post argued that a multi-chain future, stitched together through interoperability protocols, could neutralize the L1 dominance debate altogether. The comment suggested that users may not care which chain powers an application — similar to how viewers do not track which cloud provider runs a streaming service.

The same individual contended that standards and interoperability infrastructure could capture more value than any single base layer.

Hougan acknowledged that possibility, stating:

“I think this is definitely possible. As mentioned, I’m not sure we know yet. FWIW, I think Chainlink wins in either world — the commoditized world with thousands of chains linked through CCIP or the world with an oligopoly of select L1s with some element of pricing power. It just wins in different ways.”

An Open Question

For now, Ethereum’s 60% share of RWA tokenization reflects a clear institutional preference. Solana and BNB Chain continue to expand, while smaller L1s and L2s struggle for relevance. Fees remain low because capacity exceeds usage.

But if stablecoins and DeFi expand into the trillions, the supply-demand balance may tighten. Whether that leads to entrenched dominance for top chains or a hyper-competitive, multi-chain equilibrium remains uncertain.

Hougan’s core point is not that L1 blockspace will become scarce. It is that the market has not yet tested the limits. And until it does, the “commodity” label may be premature.

FAQ ❓

• What percentage of RWAs are on Ethereum?

Ethereum currently holds about 60% to 70% of non- stablecoin real-world asset tokenization.

• Why are blockchain fees still low?

Major networks built excess blockspace capacity, keeping transaction costs subdued despite growing usage.

• How large could stablecoins become by 2030?

Some projections estimate stablecoin market capitalization could reach $2 trillion to $4 trillion by 2030.

• Will top L1 chains keep their dominance?

Opinions are divided between strong network effects locking in leaders and abundant, forkable blockspace keeping competition intense.