The discussion centers around the evolving dynamics of value within the cryptocurrency ecosystem, particularly contrasting the "Fat Protocol Thesis" with a new perspective termed the "Fat App Thesis." The Fat Protocol Thesis posits that protocols, or blockchain networks, capture more value than the applications built on them. This is attributed to the inherent weaknesses of crypto applications, which can be easily forked, and the network effects that drive users to accumulate protocol tokens as they engage with various applications. The author acknowledges the validity of this thesis, noting that over the past decade, the market capitalization of blockchain protocols has significantly outpaced that of applications. However, the author argues that the landscape has shifted, and the value proposition of applications is now more compelling. The first reason for this shift is historical cycles; the author suggests that we are at the end of an infrastructure boom, and applications are poised to gain prominence as they become increasingly undervalued. The second reason highlights a transformation in the relationship between applications and protocols. In the past, applications were largely interchangeable, but now they have developed unique user bases that create real moats, while many protocols have become more similar and less differentiated. The third and most critical reason is the importance of user engagement. As users gravitate towards platforms where their peers are active, the value of applications increases. The author notes that while some applications have dominated the market, the advent of blockchain technology has opened up new possibilities for app development, allowing for innovative experiences that were previously unattainable. This shift suggests that applications can thrive without being solely dependent on rising token prices, as they can now offer genuine utility and engagement. The author expresses optimism about the future of applications, suggesting that they can generate substantial revenue and provide value to users in ways that traditional models cannot. This potential for applications to reclaim blockspace and create new revenue streams raises questions about the traditional hierarchy of value between protocols and applications. The author concludes that while protocols will continue to play a vital role, the next wave of value in the crypto space will likely flow towards applications, which are increasingly seen as the true drivers of innovation and user engagement in the ecosystem. In summary, the conversation emphasizes a paradigm shift in the crypto landscape, where applications are becoming the focal point of value creation, challenging the long-held belief in the supremacy of protocols. The author encourages a reevaluation of where value lies in the crypto space, suggesting that the future may belong to innovative applications that leverage the unique capabilities of blockchain technology.