Bankless · Monday, August 3, 2026
The podcast discusses the shift in crypto's economic focus from 'FAT protocols' to 'FAT apps.' Initially, infrastructure (like L1s and L2s) captured value, but as block space became abundant and cheap, value has moved to applications built on top. This transition is seen as a sign of a maturing ecosystem where application-layer fees now surpass infrastructure fees.
“In 2021, over 70% of the fees that users were paying were going to infrastructure. That was because we had elevated transaction costs, we had limited block space. The industry went on this big effort to say like, hey, listen, we can do better than that. Transaction fees shouldn't be a couple hundred dollars. Let's improve block space. Let's improve the infrastructure. And I think it was 2025 was the first time that application layer fees surpassed infrastructure fees.”
“So what happened here is that as we reduced transaction costs, value moved up the stack to the applications themselves. So users are paying less for the infrastructure, more for the financial services that are built on top of them. If you think about a maturing, healthy ecosystem, that's exactly what you want to see.”
“And then now we're just moving higher up the stack. So now we're at the FAT app thesis, which is just, you know, applications are businesses. Applications capture value. That's just kind of like the natural trend that we would expect to see over and over and over again.”