ARK Invest Founder Cathie Wood: New Chains Will Still Launch, Compares Ethereum to McDonald's
ARK Invest founder Cathie Wood stated that blockchain has developed for over a decade and more networks will launch in the future; understanding how each chain expands, monetizes, and acquires users is essential to assess the competitive landscape.
She shared a lengthy article by digital asset research director Lorenzo Valente, who provided a readable framework to dissect different chains' business models and weigh market entry strategies. Valente referenced Joel Monegro's Fat Protocols and Haseeb's Blockchains Are Cities as old maps, arguing that the landscape has changed over the past decade, with application layer revenue and on-chain fees now being new issues.
In the article, Ethereum is compared to McDonald's: brand, EVM operating system, and settlement real estate, while L2s are likened to franchisees building independently; after EIP-4844, blob fees dropped to the protocol's lower limit, and settlement rents approached marginal costs, with incremental profits remaining with operational layers like Arbitrum, Base, and Robinhood. Solana is compared to Chipotle: fully company-operated, with fees, priority fees, and Jito tips remaining within the same system, using inflation and hardware for throughput, and if there is a failure, the entire network halts simultaneously. Hyperliquid is likened to In-N-Out: risk-free investment, single product, with most fees going into a buyback fund; HIP-3 opens limited "franchising" with about $500,000 in HYPE collateral, while the kitchen and customers still belong to the protocol.
Valente concludes that the three architectures can coexist, and the market punishes ambiguous models: franchises must pay rent, while direct operations cannot outsource their core. He calls this the Fat Business Model: value does not automatically fall on the protocol layer but on the party that selects the right model, sets pricing for settlement and execution, and follows through.
Mechanically, this rewrites the investment research framework for valuation anchors: funds are priced for ETH, SOL, and HYPE based on rent capture, full-stack profits, and single product buybacks. Beneficiaries are direct operations and vertical application chains where fees can flow back to tokens; those under pressure are settlement layers treating block space as a free public good while trading at a currency premium. Capital has shifted from "which chain wins" to "what exactly is this chain selling, land or meals?"
Wood's sharing elevated the researcher's lengthy article to the company's external stance, without announcing new holdings or funds.
Source: Public Information
ABAB AI Insight
ARK re-evaluates public chains using the history of fast-food franchises. McDonald's relies on land rent, not burgers; Ethereum expanded through franchises but priced blobs at the cost of a floppy disk, resulting in Robinhood's transaction volume hardly flowing back to ETH for burning. Chipotle relies on rolling profits from single stores; Solana keeps all states on L1 to retain congestion premiums for validators, but must bear downtime itself. In-N-Out refuses to expand for profit margins; Hyperliquid transforms perpetual contract fees into token rights through buyback channels, then rents out kitchens under HIP-3 without relinquishing store ownership.
The capital path has shifted from buying "fat protocols" to buying "models that can issue invoices." L2s are funded by venture capital; if the settlement layer continues to charge marginal costs, tokens will only have currency narratives left. Direct chains use inflation to pay for security and must prove unit economics with REV. Vertical application chains replace ecological airdrops with buybacks, leading to product cycle risks. ARK itself has invested in LayerZero and Circle's Arc, buying connection and dollar layers under the premise of multi-chain coexistence, rather than betting on a single L1 to eliminate the rest.
Comparing Yum Brands' stock price rise after selling company-operated stores to franchisees, and Chipotle's stock price halving after the E. coli incident before recovery. The industry has shifted from protocol expansion to model control: new L1s will still launch, but must first answer whether to collect rent or operate directly, and cannot write "both settlement standards and application profits."
This represents a transfer of pricing power: block space is redefined from a public good to chargeable real estate or non-rentable kitchens. The mechanism is that 4844 breaks through rent, allowing franchisees to own users, while headquarters does not receive invoices; direct and single product chains use complete profit statements to counter narratives.
ABAB News · Cognitive Laws
- Franchises that do not collect rent only pave the way for others to open stores.
- Direct operations earn from the entire profit statement, and downtime also affects the entire profit statement.
- Value does not fall on any layer but on models that dare to price their products.