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Web3.0 is a game changer: thin platforms, fat users

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In the next two to three years, Web3.0 will change the rules of blockchain's game, namely, the transition from "fat protocol, thin application" to "thin platform, fat user".

原文标题：《 WEB3.0 改变游戏规则：瘦平台，胖用户》

Original author: AH Kong, Star Value Investment

"Fat protocols" and "thin apps" became the protocols of Crpyto investment after Joel Monegro, who has invested in companies including Twitter and Tumblr, wrote a famous analysis called "fat-Protocols" in August 2016. It can be said that this article is one of the most important drivers of the public chain wave 17 years later.

Fat-protocols is a very classic piece because it illustrates the difference between the Internet age and the blockchain age very intuitively ------ the flow of wealth between protocols and applications.

What you find in the traditional Internet is that the protocols (TCP/IP), (HTTP), (SMTP), which are the building blocks of the Internet, are extremely valuable but not matched by wealth. Instead it is protocol-based apps such as Facebook and Twitter that have captured the wealth circulating on the Internet, the so-called "fat apps" and "thin protocols".

In the age of blockchain, everything has been reversed. Wealth is basically captured by various protocols, and various DApps built on protocols serve to accumulate wealth at the protocol layer, namely the so-called "fat protocols" and "thin applications".

"Fat Agreement" and its derivative theory, directly let A16Z, USV, Pantera these top funds opened the cognitive gap with the global Crypto investors, and in the past five years has been verified by the market.

But the question we should be asking is: when fat contracts become common sense and widely known, is this system of investment decision making still correct, or is there a change unknown? I think the "fat agreement" theory has changed and should now be called: thin platform, fat users.

It is true that in the Era of Web2.0, the highest valuation of the Internet is indeed all kinds of apps, but there are still very big trend changes in this process.

Around 2000, the global Internet bubble burst, the NASDAQ crash in the early 21st century, stock prices fell in a mess. At that time, the Internet did attract a lot of users, but the business model at that time was very immature, even the basic business of "advertising" can not be done.

Why is that? Advertisers do not recognize the Internet model, product education is not enough. On the other hand, the payment system is far less developed than now (there is no online payment), users want to buy, there is no way to pay.

At that time, Tencent, NetEase and Sina made their income by buying advertisements from each other "left hand to right hand" : Today, Sina bought NetEase 2 million, NetEase bought Sina 2 million, we have done 2 million income, but the profit is not, but also have to pay taxes, the industry is a beach of backwater ------ at this time of the format, in fact, a little like Crpyto format: "fat concept", "thin application".

Therefore, the trend of fat protocol of blockchain from 2016 to now is caused by the lack of infrastructure construction of users and technologies, which leads to the existence of only "killer protocol" in the whole blockchain, but no "killer application". "Ethereum doesn't have a killer app, it has a killer ecosystem," Vitailk said bluntly at the Singapore Technology Festival on November 8.

According to the history of WEB2, once a real killer application appears on Ethereum, the narrative value accumulated in the "protocol concept" will be realized by 2C applications and gradually evolve into a "platform ecosystem". The "fat protocol" effect comes to an abrupt end on the cross-chain Ethereum and various feature public chains. Apps (platforms) start eating the Crpyto world.

But if it is just like this, Web3.0, meta-universe and even blockchain will have no investment or even existence significance ----- To know, Crpyto is really worth investing in the reason that it can overturn the current system, and then obtain excess returns in the new wealth distribution, if it can not solve the existing problems of Web2.0, Will only become the new plaything of capital.

What is the problem with web2.0? After the platform monopolizes data, it uses algorithms to construct trading traps, which is the so-called "big data kill". For example, if the online ride-hailing platform exchanges data with OA SaaS, it knows that you will be fired if you are late again. Therefore, under special circumstances, it will only provide you with the most expensive taxi service and raise the price -----. Are you afraid?

In addition, the essence of the existence of the platform is to eliminate information asymmetry between buyers and sellers, so as to achieve "fair trade" and reduce transaction costs. But once this "two-sided platform" becomes a monopoly, it goes from a "dealmaking intermediary" to a "middleman", eating the plaintiff as well as the defendant, and becoming the most profitable of the three parties (buyer, seller and intermediary).

The same is true of the facts: in 2018, eight of the top 10 listed companies in the world were platform companies; There are also eight platform companies on the list of the most profitable companies of the past 19 years. And 18 years of China's most profitable 10 listed companies, its profit is 40% of the top 500 ------- eight of the ten enterprises are also platforms.

Therefore, in the era of web3.0, the emphasis has been on giving data back to users and breaking the monopoly of the platform economy. But I don't think that's true. First of all, the aggregated transaction brought by the platform has greatly improved the transaction efficiency. What we deny is not the product of the platform, but that the platform monopolizes data and exploits algorithms to grab the biggest benefits of the three parties.

Second, not all data is valid. For most users, seeking just a more comfortable life, will not care about the leakage of some unimportant data -------- to put it bluntly is that most of the data is worthless. In addition, as Liu Yi mentioned in a speech at Wanxiang Blockchain:

"Big data of preferences stored centrally is a treasure trove. Data stored separately is difficult to be exploited by data mining and ARTIFICIAL intelligence, thus destroying its value. Destroying value on the grounds of unfair distribution is not progress but regression, just like the Luddite movement that destroyed machines in the early industrial Revolution."

Based on this, the WEB3.0 era brought by blockchain is the need to retain the advantages of big data brought by the platform and return the "excess wealth" captured by centralization to both buyers and sellers (users). In addition, through DAO, the governance rights are handed over to community users, which is the root of the platform's evolution from intermediary to intermediary.

This, I think, is what blockchain brings to WEB3.0: "thin platforms" and "fat users".

This is already happening. The most typical is Curve ecology.

Curve is DeFi's biggest lock-up, but unSIWAP is 12.5 times bigger in terms of revenue from agreements. As I said in my article Crv: A Litmus Test for Blockchain Investors, the longer Crv stays locked up, the more governance rights and returns it will get.

Based on such a design, ecological projects built on Curve will strive to acquire Vecurve and then distribute greater revenue to their own pools. Two things will happen next: First, new users will be attracted by the benefits, and the demand for ecological tokens and CRV will increase; The second is an increase in the price of open position tokens and a further reduction in supply.

In this way, in fact, to a certain extent, the "thin platform" and "fat users" change -----Cruve distributes most of the benefits to the ecology, while users vote to govern the project.

Although DAO, which is crucial in this process, is not perfect yet (I have also talked about DAO in my View: Current Hype and Further Myths), no matter Curve or other projects, THEY are still not ready for the arrival of DAO, and they are still confused and at a loss).

But that's a big change. Through DAO, the profit distribution and development path of the platform can best meet the expectations of most users, so as to improve the efficiency brought by the platform and prevent monopoly after "winner takes all". And with the rise of social, games and other high-frequency activities on the chain and the development of DAO, this trend will be more and more obvious.

I believe that in the next 2-3 years, WEB3.0 will change the rules of blockchain's game, namely, the transition from "fat protocol, thin application" to "thin platform, fat user". There will be more companies and investment decisions that differ from the fat model.

It's worth noting that Zhang lei of Hillhouse says the only constant is that everything is constantly changing. In the longer term, the Crpyto industry will once again change the rules of the game as "fat protocols" are replaced by "thin platforms".

But what does it matter? It is expected that opening the perception gap of one investment is enough to achieve financial freedom.

In the final analysis, investment is the realization of comprehensive cognition.