Understanding how to invest in cryptocurrencies usually leads to identifying which types of businesses will have the most profitable operating model that prints revenue from organic demand.

There is a theory, The Fat Protocols, thesis is a leading thesis on which types of blockchains and crypto-enabled communities are the base layer applications.

The idea is that the protocol “Layer 1” blockchains that power all applications will be able to extract the most value from the ecosystem that is built on top of their technology.

This Fat Protocols thesis was created in 2016 and since then has been expanded upon by Joel Monegro here in his follow-up Thin Protocols…

“Now we have a multitude of blockchains to choose from, which is much better. We also refer to “overlay networks” as layer 2. And today, the “Web3 Application Stack” would be a better name. But the overall framework appears to stand.

Cryptonetworks, on the other hand, tend to provide single services, and can’t “own” the interface because they don’t control the data.

Specialization helps because the more decentralized a network, the harder it is to coordinate a complete suite of services under a single interface like Google, Facebook, or Amazon do. So instead, consumer applications in crypto/Web3 are independently built on top of multiple “composable” protocols using what we could call a cryptoservices architecture (like microservices, but with sovereign components).

Now with thousands of blockchains and many “Layer 1”s are competing to attract developers and there is one that’s captured the hearts and minds of most devs today.

On the topic of hearts, Vitalik is the most brilliant, compassionate, and respected founder who continues to push the boundaries for the Ethereum community with his thought leadership and support of the ecosystem.

As we look for investment opportunities, it’s clear that the ‘End Game’ includes Ethereum and we’re focused on supporting Ethereum-compatible ecosystems that are built on top of Ethereum’s decentralized data availability protocol layer.

There is a lot to learn about blockchains and which ones matter, and we’re here to tell you that the Ethereum community is the most important and the one we suggest you dive further into as the leading web3 ecosystem creating real-world use cases like banking as a service (DeFi).

Thanks for your time.