Original Author: Mason Nystrom
Original Translation: Luffy, Foresight News
In the past 30 days, the order flow volume of Ethereum has exceeded 25 billion US dollars, with nearly half of it coming from proprietary applications. As the value of block space continues to grow and paves the way for "fat applications," the privatization of order flow will also continue to grow.
Source: Orderflow.art
So, how did we get to this point? Where are we going in the future?
The DeFi summer has spawned a large number of consumer and retail trades, which in turn has led to the emergence of trading aggregators such as 1inch, which provide users with better price execution through private order routing. Wallets (such as MetaMask) quickly followed suit, realizing that they could profit by providing convenience to users through in-app exchanges. This proves that there is an extremely valuable business model for any application that controls end-user attention (and orders).
In the past two years, we have seen two other types of participants enter the field of private order flow: Telegram bots and solver networks. Telegram bots provide users with a convenient way to trade, allowing them to easily trade long-tail assets in group chats. As of June, Telegram bots accounted for approximately 21% of the number of trades and 11% of the trading volume, with most of it being done through private mempools.
Source: Dune
On the other hand, solver networks (such as Cowswap, UniswapX) have also become the core venues for trading highly liquid trading pairs (such as stablecoins and ETH/BTC). Solver networks change the market structure of order flow by outsourcing the task of finding the best trading path to solvers (liquidity providers).
As a result, trading venues have become differentiated, with convenient front-ends (including TG Bots, wallet exchanges, and Uniswap front-ends) mainly used for small, low-value (less than $100,000) trades, while aggregators and solver networks are the preferred venues for large trades.
If you look more closely, you will notice that most of the private order flow comes from the front-end (TG bots, wallets, and front-ends).
When we consider that only 15-30% of Ethereum transactions go through private mempools, the privatization of order flow becomes even more apparent, meaning that a large portion of the trading volume of private order flow is contributed by a small number of trades.
Source: Dune
In other words, valuable order flow is more important than the quantity of order flow. The power-law distribution of users and order flow leads to an inevitable conclusion: applications will occupy the largest proportion of total value. In other words, the fat application theory is still valid.
Towards Fat Applications
The protocol layer of Uniswap is obviously valuable, but the more interesting story is happening at the application layer, as Uniswap strives to become a consumer application: by expanding the functionality of its interface, mobile wallets, and aggregation layer, it vertically integrates key components of its stack. For example, Uniswap Labs' applications (Uniswap's front-end, wallet, and aggregator UniswapX) contributed nearly 25% of the $13 billion in private order flow in the past 30 days, and nearly 40% of the total order flow.
In other areas of cryptocurrency, applications like Worldcoin occupy nearly 50% of the activity on the Optimism mainnet, which has led Worldcoin to build its own app chain, further highlighting the power of the fat application theory.
Even top NFT projects with strong brands like Pudgy Penguins are building their own chains, with CEO and Chief Pengu Luca explaining that controlling block space is beneficial for the value accumulation of Pudgy's brand and IP.
Looking ahead, applications should focus on creating new types of order flow, including: creating new assets (such as Pump and memecoins), building applications for new user scenarios (such as Worldcoin, ENS), creating better consumer experiences through vertical integration, and supporting valuable transactions, such as Farcaster and Frames, Solana Blinks, Telegram and TG applications, or on-chain games.
Final Thoughts on Fat Applications
Once the application chain theory becomes an industry consensus, fat applications will become the focus of attention for many.
My current view on the fat application theory is that we will see most of the value accumulate at the application layer, where control of users and order flow puts applications in a privileged position. These applications may be combined with on-chain protocols and primitives, similar to today's UniswapX and Uniswap protocols, Warpcast and Farcaster, Worldcoin and Worldchain. Ultimately, these protocols, especially those with the highest degree of on-chain activity (such as MakerDAO), can still accumulate considerable value, but considering the proximity of applications to users and the off-chain components that provide moats for applications, applications may capture more value.
Finally, I still believe that Layer 1 blockchains (such as Bitcoin, Ethereum, Solana) can gain significant value as non-sovereign reserve assets. If there is enough time, applications may attempt to build their own L1, similar to building their own L2. However, building L2 block space is fundamentally different from bootstrapping L1 and transforming governance tokens into commodities and collateral assets, so this may be a relatively distant issue.
The key point is that as more and more applications create and own valuable order flow, the crypto world will reevaluate applications, and the trend of fat applications will prevail.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
