From Fat Protocols to Fast Prototypes — Why the Script Has Flipped
In 2016, Joel Monegro published the now-famous “Fat Protocols” thesis, arguing that in blockchain, value accrues more to the base layer (like Ethereum or Bitcoin) than to the applications built on top. In contrast to the Web2 era where thin protocols (like HTTP or TCP/IP) supported fat applications (like Google or Facebook), Web3 was to invert the model. Protocols would become the primary value layer.
For a while, that held true. Tokens tied to Layer 1s and Layer 2s ballooned in value, while dApps struggled to retain users or generate revenue. But today, in 2025, the market has evolved and the script has flipped.
The Age of Fat Protocols Is Fragmenting
The recent Routescan State of the Market Q1 2025 report reveals the sheer scope of blockchain protocol proliferation:
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1,973 unique chains, across L1s, L2s, and L3s
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17 virtual machine types — from EVM and zkEVM to WASM and custom rollup runtimes
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Over 3,000 explorers and 145 RaaS (Rollups-as-a-Service) providers
Protocols are no longer scarce. They’re abundant, modular, and increasingly specialized. Ethereum is still dominant with EVM powering over 86% of all chains but its monopoly is eroding as zk-rollups, WASM-based chains, and app-specific rollups gain traction.
In other words: protocols have become cheap. The new bottleneck isn’t infrastructure. It’s execution and more specifically, the ability to build, iterate, and deliver value fast.
Devs Should Build Like Startups, Not Protocol Engineers
In today’s market, developers don’t need to obsess over which protocol is “fat” enough to capture value. The smart approach is to build on whatever stack helps you move fastest, test assumptions, and ship products that customers actually want.
Here’s why:
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Speed wins. With hundreds of RaaS options and modular stacks like OP Stack, Arbitrum Orbit, and Caldera, you can spin up an app-specific chain in hours.
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Interchangeability. Most protocols are now EVM-compatible. Switching between them is a devops decision, not a strategic moat.
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Customers don’t care about your protocol. They care about outcomes. Can your product solve their problem? Can they use it easily? Will it save them time, money, or stress?
Joel Monegro was right that protocols mattered when they were scarce. But now we’re in a different phase of the Web3 lifecycle. The lean startup model applies more than ever. Validate quickly. Iterate often. Protocols are your substrate, not your product.
Builders Should Ask Themselves:
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Can I deploy fast and update faster?
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Does this stack give me composability without complexity?
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Will users care what protocol I’m using — or do they just want results?
Choosing a blockchain protocol today is like choosing a cloud provider. Use what works for your product. Optimize later.
Conclusion: Lean Beats Fat
We are entering the age of protocol commoditization. The fat protocol thesis served its purpose, but the game has changed. Web3 builders now face a crowded protocol landscape. In that world, the winners will be those who build quickly, adapt to user needs, and deliver clear outcomes.
Lean startupsin web3, not fat protocols, will define the next $100B in Web3 value.