Joel Monegro wrote an insightful piece on crypto-economics called “The Fat Protocol” . In it, he concludes that unlike the Internet which is monetized at the application level, the Blockchain is monetized at the protocol level. This is analogous to owning a piece of TCP/IP and deriving an economic benefit every time it is utilized. We created the Monegro Index as a homage to Joel and to clearly illustrate and track this crypto-economic principle.
The economic implications of “The Fat Protocol” are many. As an investor in a Blockchain application or sub-token, you are giving up protocol token for app tokens, which are arguably much less valuable. As a blockchain app developer, you are giving up app tokens in exchange for protocol tokens. Unlike the Internet, there is an economic disincentive to standardize. Interesting to see how this all shakes out.
Our graph is updated every 15 minutes. It shows the market valuation for Ethereum in comparison to the cumulative valuation of the tokens built upon the Ethereum blockchain. We invite your comments on which tokens to include and suggestions on how to improve the presentation. Special thanks to Ryan Young for helping us put this together. Ryan is a very sharp guy with a bright future ahead. You can access the app without the post here: http://fatprotocol.cuvialabs.com