Money 2.0 Stuff: Thin content, fat newsletters

If you’ve been around the cryptocurrency ecosystem for any amount of time, you’ve probably heard at least one vest-wearing VC reference the “fat protocols” thesis. Widely referenced at the time, the seminal blog post from then-USV analyst (now Placeholder founder) Joel Monegro arguably kicked off the 2017 bubble: crypto founders even referenced the piece in their white papers.

The core premise of the thesis is straight-forward: In the internet (Web 1.0) stack, value was mostly captured at the application layer (think Facebook, Google, etc.) instead of the protocol layer (TCP/IP, SMTP, etc.). Crypto protocols can invert this with value being captured at the protocol layer rather than the application layer. Feedback loops are kicked off with early backers investing in making the protocol more valuable and applications drawing new speculators into the protocol.