"Fat Protocol" Thesis: Is "Thin" Better Than "Fat"? It Depends.

The 'Fat Protocol' thesis originated in 2016, referring to the idea that crypto protocols and base layer networks such as Ethereum and Solana would be valued higher than the application layer built on top of them — i.e., the decentralized applications built on those networks. 

The thesis brought forward the notion that the crypto sector consisted of “fat” protocols and “thin” applications. That compared to the internet stack which was composed of “thin” protocols and “fat” applications, with value concentrated in the latter (leading to high valuations of large US tech companies such as the Magnificent-7).

Decomposing the crypto market structure today, we see that the ‘Fat Protocol’ thesis still holds.