In the fast-paced world of blockchain, where new projects pop up daily, it's refreshing to see discussions on sustainable models that go beyond hype. Recently, crypto investor Kyle (@0xkyle__) dropped a tweet that's got the community buzzing about why MegaETH nailed their approach to tokenomics. Quoting Tushar Jain from Multicoin Capital, Kyle highlights a key lesson for Layer 1 (L1) and Layer 2 (L2) blockchains: build your own apps, leverage your funds to create value, and direct revenue straight to the token to dodge endless inflation.

Let's unpack this. If you're new to the space, tokenomics refers to the economic design of a cryptocurrency—how tokens are distributed, used, and valued over time. Poor tokenomics can lead to "perma inflation," where the supply keeps growing without real demand, tanking the price. That's a common pitfall for many meme tokens, which rely on viral marketing but often lack long-term utility.

The conversation starts with Tushar's praise for Solana's culture of borrowing smart ideas from other ecosystems. He points to Hyperliquid, a decentralized perpetual futures platform, and their clever trick: encouraging stablecoin issuers to use interest from assets like USDH to buy back HYPE tokens. This creates "REV"—short for revenue—that flows directly to the token, boosting its value and rewarding holders. Why let big players like Circle pocket all the interest from USDC on Solana when it could fuel the ecosystem instead?

Kyle builds on this, noting that MegaETH "did it right." MegaETH is an Ethereum L2 blockchain pushing the boundaries of speed and scalability. It promises sub-millisecond latency (that's insanely fast response times) and over 100,000 transactions per second (TPS), making it feel like real-time Web2 apps but on-chain. Backed by heavy hitters like Vitalik Buterin, it's raised millions to build this "real-time Ethereum."

What sets MegaETH apart, according to Kyle, is their focus on using raised funds—their "warchest"—to develop apps that generate actual revenue. Instead of just issuing tokens and hoping for adoption, they prioritize building tools and dApps that attract users and fees. Then, crucially, they route that revenue back to the token, creating a virtuous cycle. This avoids the inflation trap that plagues many chains, where emissions outpace utility.

For meme token enthusiasts, this is gold. Meme coins thrive on communities like Solana's, where low fees and high speed enable wild trading. But without revenue mechanisms, they're vulnerable to dumps. Imagine meme projects on MegaETH or Solana adopting Hyperliquid-style models: interest from stablecoins or fees from DEX trades buying back and burning tokens. It could turn fleeting memes into more resilient assets, blending fun with fundamentals.

Kyle mentions it took four years for the industry to figure this out— a nod to how crypto evolves through trial and error. He's written about it before, emphasizing first-principles thinking in investments.

As we see more chains like MegaETH lead by example, expect a shift toward sustainable tokenomics. If you're building or investing in meme tokens, keep an eye on these revenue-driven strategies. They might just be the key to turning short-term pumps into long-term gains.

What do you think— is this the future of blockchain economics? Check out the full tweet here and join the conversation.