Excellent article and analysis, Mark! I think the technological approach should also change, something like what the Uniswap V4 Hook is currently offering. Plus, it fits very well and harmoniously into agency economics - tokenomics.
Happy to expand, Marc. The heart of v4 is Hooks: custom logic you can attach at specific points of a swap - beforeSwap, afterSwap, liquidity events - so the pool stops being a static price curve and becomes programmable settlement infrastructure. For agency tokenomics that's the real unlock, because dynamic fees, revenue splits between agents, and value capture can be encoded directly into the pool and enforced by the protocol itself, not promised in a whitepaper.
But here's the honest tension, and I think it's worth naming: Hooks don't cleanly "kill" the fat protocol thesis - in a way they cut both ways. They massively boost composability at the application layer, yet they also bind that value more tightly to Uniswap as the base layer. So you could read Hooks as an argument for fat protocols, not against them.
The way I see it resolving: value is no longer captured by simply owning a thick base layer, but by whoever controls the hook layer where the logic actually lives. It's less "fat protocol" and more "fat interface" - the settlement layer stays thin and neutral, while the programmable edge on top is where the economics accrue. That's the shift I find genuinely new. Old world doesn't come back - we build a new one. :)
Solid analysis, and the logic works. Investors manage risk, and assets that confer no enforceable claim on revenues, cash flows, or underlying value are inherently difficult to price. Capital therefore migrates toward the legal claims that actually capture the economics.
Interestingly, we are seeing a parallel dynamic in the Strait of Hormuz: political pronouncements matter, but insurers and other market actors translate them into an operational price of risk... and ultimately determine whether shipping remains commercially viable... and whether the strait is open or not, no pronouncements by political leaders.
Net-net, and agreeing with your point: the market does not necessarily define truth, but it eventually forces claims about reality to settle against it.
The link “Hooks are killing the fat protocol thesis” is not entirely straightforward: Hooks enhance composability at the application level, but at the same time tie everything even more tightly to Uniswap as the base layer, which is precisely an argument in favor of the “fat protocol”, and not against.
Excellent article and analysis, Mark! I think the technological approach should also change, something like what the Uniswap V4 Hook is currently offering. Plus, it fits very well and harmoniously into agency economics - tokenomics.
old world never comes back; we build a new one :)
Agree Aleks. Can you expand on Uniswap v4, why do you find it interesting?
Happy to expand, Marc. The heart of v4 is Hooks: custom logic you can attach at specific points of a swap - beforeSwap, afterSwap, liquidity events - so the pool stops being a static price curve and becomes programmable settlement infrastructure. For agency tokenomics that's the real unlock, because dynamic fees, revenue splits between agents, and value capture can be encoded directly into the pool and enforced by the protocol itself, not promised in a whitepaper.
But here's the honest tension, and I think it's worth naming: Hooks don't cleanly "kill" the fat protocol thesis - in a way they cut both ways. They massively boost composability at the application layer, yet they also bind that value more tightly to Uniswap as the base layer. So you could read Hooks as an argument for fat protocols, not against them.
The way I see it resolving: value is no longer captured by simply owning a thick base layer, but by whoever controls the hook layer where the logic actually lives. It's less "fat protocol" and more "fat interface" - the settlement layer stays thin and neutral, while the programmable edge on top is where the economics accrue. That's the shift I find genuinely new. Old world doesn't come back - we build a new one. :)
Solid analysis, and the logic works. Investors manage risk, and assets that confer no enforceable claim on revenues, cash flows, or underlying value are inherently difficult to price. Capital therefore migrates toward the legal claims that actually capture the economics.
Interestingly, we are seeing a parallel dynamic in the Strait of Hormuz: political pronouncements matter, but insurers and other market actors translate them into an operational price of risk... and ultimately determine whether shipping remains commercially viable... and whether the strait is open or not, no pronouncements by political leaders.
Net-net, and agreeing with your point: the market does not necessarily define truth, but it eventually forces claims about reality to settle against it.
Yes, agree with you Kenneth, great analogy!
It's not only about legal claims but also about generating free cash flow (tangible value).
Really insightful and interesting to read. Go Marc!
The link “Hooks are killing the fat protocol thesis” is not entirely straightforward: Hooks enhance composability at the application level, but at the same time tie everything even more tightly to Uniswap as the base layer, which is precisely an argument in favor of the “fat protocol”, and not against.