Ethena's L1 Shows Fat Apps Are on the Rise. Can They Beat Fat Protocols? - Ep. 804
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When I say that the chat app thesis to an extent is an evolution of the l one trade, what we're getting at is that why do these projects want to expand horizontally anyways? It's because that's the biggest TAM.
Hi, everyone. Welcome to Unchained, your know hype resource for all things crypto. I'm your host, Laura Shin. We are now featuring quotes from listeners on the show. Today, we have a comment responding to my interview with Joe McCann on meme coins, Bitcoin, and Solana. On x, Heavenly Pulse writes, solid analysis, technical fundamentals drive long term value, not meme cycles. Bitcoin leads while Solana builds infrastructure, exactly as it should be. To have your comment featured, write a review of the podcast overall or leave a comment on our video on YouTube or x. This is the 03/21/2025 episod
for having me on, Laura.
This week, Athena and Securitize announced that in q two, they are going to launch a new blockchain that will be EVM compatible and cater to institutional investors. It also already has a number of DeFi partnerships out of the gate. This announcement actually appears to be part of a larger trend or at least glimmers of this trend. It's sort of new. But why don't we start with you telling us about this Converge news and what you think of it? Yeah.
I thought it was very interesting. Maybe I'll I'll I'll zoom out and say that about six months ago, I wrote an essay about how applications were starting to win a larger share of the global fee pool for blockchains. And on Ethereum and Solana, applications were now earning about 50 to 60% of all the fees on the chain, and that was up from, you know, practically, like, a rounding error about three three years ago. And what this tells me is that applications are starting to not only generate revenue, but generate more revenue than their underlying infrastructure. And what it started to make me t
So in that essay from a few months ago, you, dumped your thesis the fat app thesis, which for people who've been in crypto for a long time, they probably remember the fat protocols thesis. So explain, the fat protocols thesis for people who may not be familiar and what your new fat app thesis was. Yeah.
Sure. So the the fat protocol thesis written by Joel Minegro, almost a decade ago at this point, about eight years. And, basically, it was just an observation that Bitcoin tended to outperform the companies that are built on top. And it posited this framework for thinking about value accrual in the crypto economy where the protocols would out earn the applications, and that is the opposite of what happened on the Internet where the underlying Internet protocols are not monetized at all and all the value accrued to the applications on top, like Facebook and Google and and all that. So what I'm
There was something interesting in that essay that you wrote. This line spoke to me. It said, the FATAP thesis has nothing to do with technical specialization and everything to do with go to market. In reality, it's just an evolution of the l one trade hiding a new skin. And I actually saw, so I'm not sure, you know, if this person had read what you wrote, but somebody named Hans Solar on x tweeted, find market fit, then launch an l one, not the other way. And then he gave these examples, Game to l one, Axie inf, DEX to l one, Uniswap, PERP DEX to l 1, Hyper Liquid, and now Stablecoin to l 1 A
Sure. So going back to the tweet, if we look at the period from 2017 until even recently, let's say, like, 2023, the what were the biggest TAMs in the crypto economy? It was, basically three areas. There were sta
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