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Expected Value In Crypto & Building Infinite Blockspace - Michael Dempsey: Blog

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I recently re-read three fantastic (and imo canonical) older crypto posts that shaped a lot of how people think about value capture in crypto (Fat Protocols, Thin Applications, and Crypto Tokens and the Coming Age of Protocol Innovation). The original fat protocol thesis is well understood in terms of L1 value accrual, but it also meant that you saw a more long-tail dynamic within Dapps, which meant less of a power law from a % chance of success perspective (i.e. many tokens will be worth *something* while few go to 0, as I wrote about previously). What we see in bull markets (and perhaps crypto in general) is a shift of how people look at Expected Value. This leads us to a logical conclusion today where the majority of builders view the maximum EV thing to do is build new L1s or L2s instead of Dapps or application-centric protocols, leading to a world of further fragmentation and plentiful useless blockspace. They then take a step down and build abstractions to siphon off some the L1/

I recently re-read three fantastic (and imo canonical) older crypto posts that shaped a lot of how people think about value capture in crypto ( Fat Protocols , Thin Applications , and Crypto Tokens and the Coming Age of Protocol Innovation ). via Power Laws & Normal Distribution in Crypto The original fat protocol thesis is well understood in terms of L1 value accrual, but it also meant that you saw a more long-tail dynamic within Dapps, which meant less of a power law from a % chance of success perspective (i.e. many tokens will be worth *something* while few go to 0, as I wrote about previou

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