Source: Joel Monegro, "Thin Applications," avail. online (Jan. 2020)
- Monegro's Fat Protocol thesis holds that most of the value in crypto will be captured at the base protocol layer, not the top application layer. Unlike traditional web companies, in the decentralized web stack, the protocol layer is thus "fat" while the application layer is "thin."
- Virtues of the fat protocol / thin application stack for startups include ability to compete with well-funded, entrenched incumbents that "own" customers by taking a different path outside of the established system. Open-source frameworks proffered by the "cryptoservices architecture" allow startups to build quickly and cheaply by agonistically leveraging existing infrastructure and innovation. (See also Field Note 11. On "Dixon Decentralization")
- Application layer success is needed for protocol layer success since the former contributes scale and value to the underlying network. In other words, the applications render the protocol useful.
- It is a basic statement that even though most of the network value is captured at the protocol layer (according to the Fat Protocol thesis), this does not mean there are no financial / investment returns to be captured at the thin application level.
