The emerging thesis known as the 'fat app' concept suggests that crypto applications may capture more value than the underlying blockchain technologies. This perspective, gaining traction with the rise of Hyperliquid, indicates a potential shift in investor behavior regarding the valuation of application tokens over layer-1 protocols. Bitwise CIO Matt Hougan noted that this idea might soon enter mainstream media. In contrast to Joel Monegro's 2016 'Fat Protocol' thesis, which emphasized value accumulation at the base layer, the 'Fat App' thesis posits that applications will command more user engagement and revenue. Institutional investment comments allude to changing market dynamics, with application tokens outperforming core blockchain tokens. Despite some skepticism from industry figures regarding the practicality of the fat protocol theory, evidence is mounting that the market is reflecting this new narrative, as seen in the price actions of various tokens. While Hougan remains optimistic about the prospects of major layer-1 protocols, a nuanced debate continues regarding the future relationship between application and protocol valuations.

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