📲 The “Fat App” Thesis Is Taking Over Crypto — and Hyperliquid Is Its Poster Child

[cryptoenthusiast]

A new investing narrative is catching fire in crypto: the Fat App thesis — the idea that applications, not blockchains, will capture most of the industry’s future value.

Bitwise CIO Matt Hougan says it’s spreading fast:

“All the cool kids are talking about the Fat App thesis. Feels like that could be a dominant theme in the coming months.”

What Is the Fat App Thesis?

The Fat App thesis flips the famous 2016 Fat Protocol thesis on its head.

Old view (Fat Protocol): Most value accrues to base layers like Ethereum, Solana, or Avalanche.

New view (Fat App): Apps will dominate — capturing more revenue, user attention, and token demand than the blockchains they run on.

If this thesis gains traction, it could shift investor focus from layer-1 coins (ETH, SOL, AVAX) to application tokens.

Market Is Already “Voting”

Institutional investor Starkiller Capital argues the trend is visible today:

Major L1s have stagnated vs. Bitcoin. The SOL/BTC ratio is down 16% YoY.

The strongest token rallies are coming from apps, not protocols.

Hyperliquid (HYPE) is the standout proof point:

Price: $55.56

12-month gain: +1,636%

Built as a pure application play, HYPE’s token velocity is tied directly to real users and real flows, not just “blockspace rent.”

Industry Debate

Not everyone is anti-L1. Hougan himself disagrees with the extreme take:

“I think major L1s are actually well-positioned for the next year. But the Fat App argument is well-argued and worth considering.”

Crypto investor Jeff Dorman adds that the Fat Protocol thesis may have distorted capital allocation, pushing every app to “try to become an L1” and inflating the value of weak chains.

Why It Matters for Investors

If Fat App prevails:

Application tokens (like HYPE) could see stronger capital inflows.

Layer-1s might trade more like utilities — important but less speculative.

If Fat Protocol reasserts:

L1s like Ethereum, Solana, Avalanche remain the long-term value engines.

Either way, the debate is reshaping how analysts value crypto projects, from trading desks to venture capital funds.