Is the Fat Protocol true?
I thought again about the relationship between protocols and applications.
Good morning.
This is Mitsui, a web3 researcher.
Today, I'd like to write about what I think about “Fat Protocol”.
What is the Fat Protocol?
Fat Protocol" translates directly to "enrichment protocol," and unlike the Internet, the protocol layer is stronger in a blockchain-centric world.
In Web 2.0 (The Web), platformers, led by GAFAM, were powerful, as the saying goes, "winner take all". This was the way things were supposed to be today. This was the era when the "Application Layer" was strong, as the left side of the diagram above shows.
However, in the era of blockchain, the application is on top of a specific protocol, such as Ethereum or Solana, which logically means that no matter how large the Application Layer gets, it will never exceed the protocol.
For example, no matter how much money a YouTuber makes and how famous he becomes, he will never surpass YouTube, the soil that generates him. It's more like YouTube will grow and grow and grow as more and more famous YouTubers emerge.
Similarly, it's like even if OpenSea (Dapps) gets going, CryptoPunks (NFT) gets going, and Uniswap (DeFi) gets going, the underlying chain, ETH, will grow.
This makes a certain amount of sense, but I wonder if this is really the case. I also began to wonder if this is really the case.
→Click here to read the original blog that proposed the "Fat Protocols".
Battle to attract applications
Most of the actual protocols (blockchains) are aggressive in attracting applications by offering grants. They are actively asking people to make applications on their own chains because they are willing to pay for it.
After all, if there is no application on top of any protocol, there is no grounding with the users and the ecosystem will not expand. Then the teams and brands that can create applications that can attract customers will be pulled from each protocol.
Platforms such as Netflix, AmazonPrime, etc. are certainly strong, but the content on them is very important because the platform alone cannot provide value. Therefore, content that can attract customers will be purchased at a high price. This same phenomenon is happening between applications and protocols.
In addition, as multi-chain and omni-chain support has become mainstream in Dapps these days, there are more and more applications on multiple protocols, instead of just one protocol.
In this light, the balance of power between protocols and applications and the way value is created seem to have changed a bit.
It was in 2016 that "Fat Protocols" were proposed. At that time, ETH was the only way to create something on the blockchain, so the ETH ecosystem was expanding rapidly, but then a large number of blockchains came out, and the power balance changed.
Of course, in logic, the application never goes beyond the protocol because it is built on top of the protocol and leverages those tokens, but what can I say, I think the application layer is important.
Applications that have the ability to attract customers are usually strong.
Well, I just wrote "strong," but I also feel that the expression "applications vs. protocols" is a bit different, because protocols are the foundation, not pure war. So I don't think it is a world of "which is stronger" or "what is the balance of power".
It's not very coherent, but what I wanted to write about,
With the simplification of multi-chain support and the proliferation of public chains, the ptrochol side is getting more desperate to be chosen than in 2016.
But I started to wonder if it might be wrong to compare the power relationship between protocols and applications based on the same concept as that of the Internet. I'm beginning to think so.
I'm talking about the "Fat Protocols".
Well, I think the original theory of "Fat Protocols" was more like a comparison of the way value is created and the structure of the protocols, rather than a comparison of power relations.
The starting point is different because the goal of the protocols is to become public goods and infrastructure, while the goal of the applications, growth, and monetization is to become public goods and infrastructure. So it is difficult to make a general comparison, and it is also difficult to judge value.
I wrote about Fat Protocols because I suddenly remembered and was curious. To be honest, I don't think today's blog is very comprehensive, but I hope it will help you to think about protocols and applications again.
That's all for now, I would appreciate it if you could help me by liking, commenting, and sharing on social networking sites. Thank you for reading!
Disclaimer: This is written after careful examination of researched information, but since it is privately operated & the source is often in English, there may be some mistranslated or incorrect information. Please understand that some information may be mistranslated or incorrect. Also, we may introduce Dapps, NFTs, and tokens in the articles, but we do not have any solicitation purpose. Please purchase and use all at your own risk.
Writer
mitsui@web3researcher
Daily information about web3 (projects, news, explanations of vocabulary, interviews with project owners, and articles about learning and thinking from research).
I run a web3 based Substack with over 1,000 subscribers in Japan. If you have a project that you would like to expand for Japan, please contact me on Twitter.
※This is a translation of a Japanese article, so I apologize for any unnatural English.