The Fat App Thesis

The Fat App Thesissubstack.com
The fat app thesis
by pedrovilela.eth2245 🥝 • 2y
AI summary of the linked article

Writer argues that for the first time in crypto history apps, not protocols, will capture the most value, reversing the "Fat Protocol Thesis" that Joel Monegro published in 2016. The author cites 2024 as the year apps such as Polymarket, Pump.fun, Hyperliquid, Virtuals and ai16z were the winners, and says many protocols have gained hype mainly from the ways they support apps. The argument rests on three reasons: historical cycles, the fact that apps now have user moats while chains are largely interchangeable, and users gathering where other users spend time through apps.

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Yep, we saw the same thing during the dotcom era. Cisco reached a $500B+ valuation because everyone thought it's the infrastructure bet on the Internet, while Amazon and eBay had about 20X lower valuations.

Plus many of the companies used accounting tricks to pump the numbers, kind of like L1s and L2s do today.

There's a good article about this period:

Re: protocols being interchangeable, I think it's true to a degree.

It's true for all these centralized and fast chains like BSC, SOL and many L2s. But for DeFi the trust assumptions matter - that's why a lot of high ticket DeFi is still done on Ethereum Mainnet.
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