Opinion: Hatu Sheikh, founder of Coin Terminal
Blockchain and DAPP are important, but stakeholders in the crypto industry often prioritize applications based on adoption principles and revenue distribution. Dapps won’t work without the underlying chain. The market needs to support blockchain for long-term value generation.
The value perspective is wrong
Blockchain and DAPP must work together to coordinate functions for better usability. Instead, the analyst creates a binary between the chain and DAPP based on the Web2 structural framework.
In the “FAT protocol,” Joel Monegro claimed that the value within the Internet stack consists of a “thin” protocol and a “FAT” application. In other words, investing in underlying protocol technologies such as TCP/IP, HTTP, SMTP will yield lower returns than applications such as Google and Facebook.
Monegro further said that values are reversed in the “blockchain application stack.” The underlying protocol layer accumulates more values than the application layer, leading to “fat” protocols and “thin” applications. He later published an updated Rejoinder to clarify “the success of the application layer as a requirement for protocol growth” and how value capture relies on the overall addressable market.
As apps become more common, they will attract users to the underlying blockchain that interacts with apps using tokens in the chain. Such demand pressures will lead to growth in token prices, and ultimately create a strong network where the blockchain captures the maximum value.
A recent research report showed how revenue generation parameters, such as Onchain fees, can turn Monegro’s papers upside down.
In 2024, blockchain, which controls 70% of the crypto industry’s market capitalization (excluding Bitcoin and Stubcoin), won a fee of $6 billion. Meanwhile, its market share was just 30%, earning $3.3 billion, generating 35% of the total. This trend continues as Dapps recorded a total cost of $1.8 billion in Q1 2025 compared to $1.4 billion for blockchain.
According to the report, apps generate real value and user interactions as higher prices reflect increased usage. People use the app to trade, play, invest, socialize and spend time, as no one logs into the app just to access the blockchain. Therefore, apps create value and revenue opportunities.
As the app is the user’s first interaction layer, there is a higher demand and growth channel. The report states, “The blockchain may have built roads, but the app is building cities.”
Recently: All Chains are Islands: Crypto-Level Crisis
However, without “roads”, it is impossible to navigate and access “city.” Therefore, such a value lens for assessing whether the market prefers chains or apps is a myopia perspective.
Analysts and veterans in the crypto industry need to understand the key role of blockchain in operating the crypto industry. As a result, the crypto market must always support blockchain, regardless of the potential for economic value.
Blockchain is the foundation of the crypto market
Blockchain is the necessary trust anchor arbitration transaction for decentralized applications via transparent and immutable ledgers. During multi-party DAPP interactions, blockchain acts as a source of truth for tampering records, making the chain an essential infrastructure layer.
Blockchain is essentially a timekeeper for DAPP-generated data, so the chain-vs-app binary arguments are false. Such timestamped data promotes all on-chain transactions and enables people to use DAPP in a reliable way.
If the value potential of blockchain is based on revenue and user adoption, it is irrelevant, as it is a task for gaming, social and financial applications. Blockchain is the foundational layer for building applications and other user products that generate returns on investment capital.
Furthermore, despite the challenges of liquidity and integration, the steady rise in modular app chains is another example of the importance of blockchain architecture. When resource-hungry apps consume network capabilities, app chains can work as independent blockchains to improve performance and reduce latency to solve the problem.
Resolving network bottlenecks using app chains indicates that the apps do not work independently and that a corresponding chain architecture is required. Therefore, each modular app chine has its own computing resources, storage capacity, and resources to prevent competing applications from degrading performance.
These examples illustrate why the crypto market values blockchain over standalone applications. That’s because the app won’t survive without blockchain.
“Value” does not always mean financial incentives and growth indicators. Sometimes values can also come from market perceptions of their fundamental role within the industry. In this market scenario, blockchain is always much more valuable than individual applications, regardless of fees or revenue.
Opinion: Hatu Sheikh, founder of Coin Terminal.
This article is for general informational purposes and is not intended to be considered legal or investment advice, and should not be done. The views, thoughts and opinions expressed here are the authors alone and do not necessarily reflect or express Cointregraph’s views and opinions.
