Revisiting the fat protocol thesis
In my previous post, we explored how stablecoins are exploding in multiple adoption metrics. In this piece, we will explore whether stablecoin adoption is fuelling a rise in the price of Ethereum as an asset. A commonly held belief in the industry is investing in layer ones will likely create more value than investing in applications. This is because as adoption in the application layer increases, transactions on the main-chain, which in turn increases the demand for the asset powering it. Joel Monegro captured how speculation, boom-bust cycles and early adoption leads to loops that create a rise in the price. I strongly suggestreading his piece from 2016 for more on this. For now - we will look at a critical statement from the piece.
What’s significant about this dynamic is the effect it has on how value is