The Privatization of Orderflow and Resurgence of the Fat App Thesis

The article argues that privately routed order flow is growing and that value in crypto will accrue mainly to applications rather than base protocols, a view it calls the fat app thesis. It cites Orderflow.art data showing Ethereum handled over $12 billion in order flow volume over the 30 days to Aug 19, with twice as much coming from proprietary applications. Telegram bots accounted for about 17% of transactions and 6% of trading volume as of July, according to Dune data, and Uniswap Labs' applications originated about 16% of the $8 billion in private order flow volume over the last 30 days. The author's view is that the majority of value will accrue to the application layer, while Layer 1 chains may still capture value as non-sovereign reserve assets.