🤔 [Analysis] Thin protocols – Teemu Paivinen

Teemu extends Joel Monegro's "Fat Protocols" idea and argues that because of the 1) ease of forking 2) incentive to compete once perceived opportunity is large enough 3) improved interoperability and interchangeability of protocols, there will be many thin protocols that together form a fat protocol stack. As a result, the market will tend towards but never reach an equilibrium where:

• There are no marginal benefits to greater or smaller scale
• There are no perceived opportunities large enough to incentivize additional specialization
• There is enough diversity in protocol permutations for there to be no incentive to fork

Users will be the ultimate winners as there will be more specialized and cheaper protocols at almost perfect competition.