Current non-spam demand for blockspace is probably 1% of the available supply across all L1s and L2s, yet the crypto world is still obsessed with L1s and L2s. Why is there not a massive push towards applications to fill said blockspace? Please make me understand why I'm wrong and what I'm missing?

There are lots of apps - all the ones that got activity in the last cycle, plus all the new ones that have been built in the last 2 years.

It's just that hardly anyone is using them because, you know, bear market...

You mention stablecoins as an example of product market fit. A couple things being done to improve that particular app:

- account abstraction for gasless transfers on L2 (this could enable a seamless payment app)

- experiments like RAI or LUSD to improve decentralization or use different collateral

Yes, to clarify, by focusing on applications, I do also mean improving and expanding usage of existing applications (a couple of my recent posts talk about why that should be more of a focus than new apps right now)