Bitcoin’s execution layer. Increasingly convinced that there will likely be one main execution layer for Bitcoin. Game theory of staking dynamics, combined with liquidity concentration, points to this. Staking dynamics: Ethereum has one major source of low-risk yield: the consensus yield. Even though you could earn higher-risk, higher-return yield elsewhere, most capital goes to the lowest-risk option: the effective ETH fed rate. Multiple on-chain Bitcoin yield options would converge on the lowest-risk yield that is meaningful enough. Offering higher yield with added risk can’t lure that capital away. The Bitcoin layer that can offer the effective BTC fed rate yield at scale is the one with the largest market cap and economy size. Liquidity concentration: We saw this with Solana vs. Ethereum L2s. A single execution chain offers better UX, and everyone benefits from concentrated liquidity rather than fragmented liquidity and assets spread across multiple L2s (the various Ethereum ones). We can try to put a valuation framework for what Bitcoin’s execution layer should be worth (an exercise for another post). Right now, I’m just making the point that the probability of getting N different execution layers is very low (unstable equilibrium and bad UX for users). Either one major execution layer exists where, say, 10-30% of BTC supply is actively deployed, or Bitcoin remains a passive asset. I’m an optimist by nature; I believe that we’ll get one major Bitcoin execution layer.