Building Web3 Super Applications: The Evolution from Fat Protocols to Fat Applications

The Web3 space is undergoing a paradigm shift, evolving from fat protocols to fat applications. The concept of fat protocols was proposed by Joel Monegro in 2016, and it has achieved good results as an investment theme, but it seems insufficient in the long run.

This article proposes the concept of Fat Application ( FAPP ), assuming as follows:

Applications that offer a wide range of products will accumulate the greatest value.

The dominant applications of Web2 often start from a specific professional field, and after gaining a dominant position, they provide a range of different products, leveraging network effects and fully utilizing user advantages:

"Attract them with tools, confine them with the network."

Killer applications and products in the cryptocurrency space excel in many ways. A certain trading platform is a typical example, as it spares no effort to cater to every user and gradually offers all cryptocurrency-related products within its custody platform.

From the very beginning, the main Web2.1 applications have been exchanges providing a multitude of services, which seem to form a gateway to Web3. We believe that the same logic applies to pure Web3 on-chain products.

This is the new "paradigm shift"; value accumulators are shifting from protocol to application. Ironically, exchanges are not Web3 applications. They are fully Web2, requiring permission and centralized, yet they siphon off a significant amount of value from the entire ecosystem.

In the future, on the battlefield for value, we believe that protocols may lose to Web3 native applications, with two possible paths:

1. Appchains (

2. All-encompassing super application

We define a super app as "the WeChat of the crypto space." This sounds a bit daunting, but this dystopian vision is indeed hopeful to become a reality. The internet follows a long-tail model: at the front are one or two Amazon-level leaders, and behind them are a multitude of small players competing for the remaining market share.

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Historical Review

Many people compare blockchain to a city, and Ethereum to modern Manhattan. We have different views. The current construction is still quite primitive; we would compare blockchain to a religion and applications to cities.

We believe that today's applications are like medieval cities; compared to modern Manhattan, their historical status remains relatively weak. In our analogy, blockchain is religion, and Ethereum is the medieval Catholic Church.

Medieval cities were established on the basis of papal protocols, enjoying only half of their autonomy, with papal power being supreme. The Pope participated in the formulation of tax policies and guidelines, with the Bible being the main basis for tax law, and various fees flowing to Rome.

In simple terms, later a developer named Martin appeared, nailing a white paper on the church door, which contained 95 lines of code. A few years later, a hard fork occurred. Some validators joined the newly forked protocol, while others decided to stay.

As a result, application ) cities and principalities ( became more independent, and for centuries, the influence of the papacy on the flow of funds gradually diminished. The papacy still played a certain role, but the public began to accept the ideas of nation-states and secularism, giving rise to new economic models.

What we want to say is that the concept of the fat protocol is not obsolete, because we are still in the early stages of the blockchain era ), namely Web 3(. And as applications of cities can organize themselves, they can become powerful entities of value accumulation, similar to nation-states, weakening the ability of the clergy ) to charge in the blockchain (.

In other words, over time, applications, mainly super apps or application chains, will accumulate more value.

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Application Chain and Super Applications

The concept of application chains is not novel; it first appeared in the Polkadot white paper in 2016. It proposed the idea of heterogeneous chains sharing security through a common set of validators. Cosmos proposed another approach to heterogeneous chains: each chain is independent and only unified through an SDK.

Since then, most people have accepted the concept of shared security. Cosmos has also changed its direction. The conclusion people have drawn is that assembling a quality set of validators from scratch is not easy, and doing so before the product finds a market may be meaningless. Clearly, low-quality block space is like a parasite; it wastes validator resources, and often there are no real use cases.

Application chains are tailor-made: the core chain will be optimized for existing and future use cases built upon it. For example, liquidity chains can support decentralized finance applications through various specific designs. Such application chains do not compete with others for block space and can advance the execution and fee logic that is best suited for their use cases.

We believe that ) is the best candidate for becoming a super application on the ( application chain. The development trajectory is roughly as follows:

1. Launch applications on the mainnet of a universal chain, conduct proof of concept, and demonstrate whether the product matches the market. Target a known user base.

2. After achieving success, extend to multi-chain and even launch your own execution environment ) application chain ( to exert greater control and obtain more value. A certain project is currently a model that has reached this step.

3. Eliminate all on-chain traces and execution environments, providing a seamless super application experience. Attract users gradually by adding features that encourage people to invest more time and money in the product.

4. Congratulations on becoming a super application.

For example, a certain project seems to be attempting to build a super application that integrates social and financial aspects. This integration is expected to form a strong moat ). Think of credit/social scoring ( used for unsecured loans. Certain projects also seem to be developing in this direction; they have customized their own rollups and lending markets to align with existing options products. The key point for both projects is under-collateralized lending, which is expected to unlock true DeFi 2.0.

A certain DEX and a certain NFT trading platform are currently the largest applications by fee metrics. They both started with a single use case in which they excelled, accumulating a key user base of ) and bots of (, with users willing to pay ETH to use these applications. They later also acquired NFT aggregators to strengthen their core products or to achieve horizontal expansion of their offerings.

Whether the chicken or the egg came first, as long as there is liquidity, users can be acquired. As long as there are users, more products and customized experiences can be offered to them. One method is to provide your own product wallet to the user community and improve the user experience. ) Not only better UI/UX, but also wallet features tailored to the product. ( Successfully launching product suites ) platforms ( and seamlessly absorbing consumer-facing applications will stand out.

If we consider not just various financial use cases, liquidity is not the key to the rise of all super applications. However, even so, it must rely on other factors. Taking games as an example, it requires engaging gameplay and a vibrant player economy.

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Trojan Middleware

The above text describes a user-centric approach to the development of super applications. Simple DeFi applications with outstanding user experiences can capture market share and improve profitability by horizontally integrating with traditional financial products and/or other on-chain products, while also building a moat. At the technical level, these applications will evolve from simple smart contract interfaces to mature super applications with their own application chains.

Trojan middleware is another option; it can pass through the front door of the application amidst a welcome sound, bringing a better developer experience and various advanced features such as account abstraction, front-running protection, and MEV cashback. Trojan middleware is the top trading mempool )mempool(, which can dominate block construction by accessing the order flow from the application.

Through blockchain construction, the Trojan middleware can provide functionalities that the application itself cannot easily replicate, such as on-chain abstract transaction execution. Ultimately, by creating an outstanding wallet/application store experience, control over touchpoints can be achieved. Some blockchain builders have already demonstrated the ability to access exclusive order flows, upon which we can build the things we refer to.

But aside from being deceived by the Trojan horse, there is another option. We believe that the ultimate state of any ambitious super application is to become a major blockchain builder. This can provide the best experience for super application users and offer the best guarantees for transaction execution in a manner deemed appropriate by the super application.

In the Web2 space, major consumer enterprises tend to seek to build their own payment channels to avoid excessive reliance on a single provider. Similarly, Web3 super applications will also seek to exert control over users' financial operations.

Super applications are expected to ultimately become encapsulators of Ethereum and other blockchains, while hosting the terminals of all other future "applications" that will become functions of the super application. Even now, exchanges can be seen as applications that encapsulate blockchain to provide a better user experience. Most users do not have to leave a certain trading platform to access a variety of content.

If encrypted native applications can span all reasonable underlying layers and achieve seamless bridging, extreme homogenization of block space can be effectively realized, that is, commodification. The best path for optimal execution will naturally emerge, and users may not even be aware of the specific execution trajectory. Of course, there are limitations here. It relies on the quality of the deployed blockchain's protocol and whether the security level is high enough.

In this sense, a super application requires different blockchains to provide services. Furthermore, an application chain is just another way to enhance execution control. But in this sense, a super application will ultimately be a centralized place.

Users and developers can directly access the blockchain, but super applications, as blockchain abstractions, will excel in many aspects:

1. Lower transaction fees

2. A smoother application development process

3. Better user experience

Super apps will become Amazon, and in addition, users can still directly use a large number of blockchains, just like vendors and buyers use Shopify.

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The Blockchain Space War of the 2020s

The power struggle between applications and the underlying layer is inevitable. The underlying layer gains value through transaction fees ) even as the fees themselves are diminishing, making it increasingly difficult to maintain currency premiums (, and providing security and a user base in return.

Successful applications with a loyal user base will also seek their own ways to obtain value and exert greater control over how to best serve users. In other words, applications want to share the foundational success of blockchain: reflected in the monetary premium found in the demand for native tokens.

This puzzle has several key parts: Where does the transaction occur ) starting point (? Who controls the block construction process ) to turn externalities into value capture (? What is the user's intention? And who is setting the monetary rules?

The transactions that create value for blockchain begin with the application ) or wallet ( layer. What users need is the application, not the blockchain, because they are not idealists, but primarily pragmatists. This force will inevitably lead to a situation where blockchains specifically targeting applications become an execution option.

This provides a broader capability for value acquisition, allowing for better trade-offs in design, thereby better meeting user needs than the standardized layer. The base layer currently only has an advantage in the last factor, which is monetary rules. And this advantage is also temporary. Please look at another historical segment:

In many ways, we can compare the base layer to the British Empire and the pound. In the late 18th century, the American colonies rose up against British rule due to heavy taxes and fees. This led to the Boston Tea Party and the American Revolutionary War, giving birth to the greatest "super application" in world history.

Nearly 200 years later, the British Empire collapsed after World War II, and the pound lost its status as a reserve currency, with the dollar taking its place. This also led many countries to flee the empire, with India becoming the next.