Platforms in Crypto: The Next Phase of Crypto Growth | Roundup

This episode dives into the evolving definition of platforms in crypto, dissecting how Web2 analogies map to Web3, and revealing the strategic shifts required for success in a maturing ecosystem.

Bell Curve Roundup: A New Strategic Focus

• Podcast Evolution: The Bell Curve podcast is shifting from a news roundup to deep dives on single, critical topics, moving beyond infrastructure to explore crypto's intersection with other major technologies like AI and Real-World Assets (RWAs).
• Strategic Emphasis: The show will now focus on business strategy, go-to-market approaches, and leveraging open-source in competitive ways, reflecting crypto's transition into a "scale-up phase."
• Today's Topic: This episode specifically examines "platforms"—how they've historically functioned in Web2, their applicability to Web3, and lessons for differentiation and market entry.

Defining a Platform: Web2 Litmus Tests

• Core Definition: A platform is fundamentally "a system that can be programmed and therefore customized by outside developers," as defined by Marc Andreessen.
• Key Characteristics: Platforms exhibit extensibility, composability, two-sided network effects, non-linear value growth (Metcalfe's Law), and increasing returns to scale.
• Litmus Tests from Tech Leaders:
  • Jeff Bezos: "Do your internal teams have to compete with external teams?" (e.g., Meta and Farmville).
  • Bill Gates: "Do others make more than you?" (relevant to Cosmos debates on economic security).
  • Steve Yedge: "A platform is a product that can be used by people who do not work for you without talking to you."
• Strategic Implication: These definitions provide a rigorous framework to assess whether a crypto project truly functions as a platform or merely claims the title for higher valuations.

Web2 vs. Web3 Platform Analogies: The Monetary vs. Tech Debate

• Miles O'Neal's Perspective: As Head of Product at Delta (a new L1), Miles argues that pragmatically, building a "monetary platform" is not a viable strategy. He emphasizes that builders should focus on traditional technology platform playbooks.
  • Quote: "Why is Ethereum a monetary platform when Base is a clearly a developer platform?"
• Zave Megan's View: While acknowledging historical analogies, Zave notes the limited number of generic infrastructure winners in Web2 (e.g., AWS). He highlights the "internet of blockchains" vision in Cosmos, which struggled due to a lack of differentiated applications and user demand.
• Rethinking Apps: Zave suggests crypto is currently "rethinking apps" and the fundamental demand for their existence. Solving this problem, as Hyperliquid did with its perps exchange, positions a project uniquely to build a platform on top of a successful product.
• Actionable Insight: Crypto projects must prioritize solving real user problems with compelling applications before attempting to scale as generic platforms.

Product-Led vs. True Developer Platforms: Web2 Lessons

• Apple (iOS): A prime example of a product-led platform. iOS is a point of integration where apps generate more revenue than Apple, and internal teams compete externally. However, Apple maintains stringent requirements and a "fat take rate" (30%), demonstrating significant leverage.
• Facebook (Meta): Initially attempted a developer platform with its social graph (e.g., Farmville) but ultimately defaulted to a product. The shift from web browsers to mobile (iOS/Android) revealed Facebook's lack of leverage when Apple took a 30% cut.
• Strategic Implication: The success of a platform often hinges on owning the user relationship first, or having a unique "wedge" that attracts developers. Business forces can quickly expose where true leverage resides.

Ethereum and Solana: Crypto's Strongest Platform Cases

• Ethereum's Strength: Mike argues Ethereum is crypto's strongest true platform, citing its ability to "fire a huge portion of their users" (pushing to L2s) and actively distance itself from DeFi, yet still accrue enormous traction and network effects.
• Solana's Parallel: Miles agrees, noting Solana's similar platform characteristics, especially when comparing the "GDP of what's happening on your platform" to the platform's own revenue.
• Zave's Analysis of Ethereum's Genesis: Ethereum's early success as a Proof-of-Work (PoW) chain, combined with its first-mover advantage in enabling programmable money (EVM), attracted developers who had already profited and were eager to build.
• Solana's Differentiation: Solana solved Ethereum's high-cost and speed issues during peak network activity, offering a Rust-friendly environment that appealed to many developers. This created a "flywheel" of cheap transactions, developer familiarity, and user adoption.
• Actionable Insight: First-mover advantage and solving critical pain points (cost, speed, developer experience) are crucial for establishing a dominant platform.

Miles' 2x2 Matrix: Paths to Platform Success

• Two Primary Paths:
  1. Product First: Build a successful product with many users, then expand horizontally into a platform. Users attract developers.
  2. True Developer Platform: Start with a platform, but require a "differentiated wedge."
• Differentiated Wedges for Developer Platforms:
  • Market Timing: Being the first to enable a new compute paradigm or application category (e.g., Ethereum with trustless, verifiable applications). This is rare today.
  • Brand/Distribution: Leveraging an existing brand and user base (e.g., AWS in Web2, Base leveraging Coinbase).
  • Capability Edge: Offering a narrow, specific, and uniquely easy solution to a top-of-mind developer problem, supported by high-leverage showcases.
• The "L1 Playbook" Failure: Miles describes the diminishing returns of the "hot L1" playbook, where new chains offered grants for generic DeFi forks. This led to "adverse selection," attracting less committed developers and undifferentiated apps.
  • Quote: "It just became very very clear that like it is not a chicken and the egg problem at least for consumer app platforms like first come users once there are users there will become demand for application and like this is the by far and away the strongest and only incentive out there."
• Windows' Historical Lesson: Early Windows failed to attract strong builders despite large cash incentives because it lacked a strong user base, demonstrating that developers follow users, not just money.
• Actionable Insight: For new platforms, a clear, differentiated "wedge" is essential. Relying solely on grants for generic applications is a failing strategy; user acquisition must precede developer attraction.

Opinionated vs. Neutral Platforms: The Evolution of Strategy

• Ethereum's Neutrality: Ethereum benefited from an "immaculate conception," allowing it to be a neutral, blank-slate developer platform from day one. This structural advantage is unique and difficult to replicate.
• Solana's Active Approach: Solana, lacking Ethereum's initial neutrality, adopted a more active, product-led strategy. Examples include "Break Solana" (showcasing speed), supporting Serum (attacking DeFi with an on-chain order book), and the Saga phone (attempting to accelerate app distribution).
• Hyperliquid's Opinionated Model: Hyperliquid represents the next evolution, being far more opinionated about its block space's use cases. While technically open, its practical operation suggests a more curated environment, moving away from Yedge's "without talking to you" definition.
• Strategic Implication: The market increasingly forces new platforms to be opinionated and strategically differentiated. Pure neutrality, while ideal, is a luxury few can afford in today's competitive landscape.

Go-to-Market Evolution and "Kingmaking"

• Ethereum Foundation's Shift: Zave notes that the Ethereum Foundation, traditionally bottom-up, is now adopting a more top-down, business-oriented approach, learning from Solana's success in developer support and ecosystem coordination.
• Coordination Challenges: Decentralized, bottom-up approaches often struggle with coordination, leading to diffused focus and execution issues. Strategic "kingmaking"—selectively supporting high-quality teams—can be a necessary business decision.
• Newer Chains (Monad, MegaETH, Berachain):
  • Monad: Leverages significant funding to attract developers, often through incentives.
  • MegaETH: Focuses on finding high-quality entrepreneurs and pushing for "new apps that haven't been done before," leveraging a super-fast EVM.
  • Berachain: Led with first-party applications (e.g., a homegrown borrow/lend protocol) to ensure core infrastructure and user experience, addressing the "empty graveyard" problem.
• Platform-to-Product Pivot: Zave observes a trend of infrastructure/platforms pivoting to become products, especially when generic infrastructure fails to attract developers but the underlying technology solves a market problem (e.g., a "browser node" for enterprise data).
• Delta's Hybrid Strategy: Miles explains Delta's approach: incubating both B2B products (e.g., verifiable AI) that leverage their domain SDK for specific verticals, and differentiated consumer applications that highlight Delta's unique capabilities, avoiding the "grants game" for generic EVM compatibility.
• Actionable Insight: New platforms must be highly strategic in their go-to-market, often requiring a more top-down, opinionated approach or a hybrid model of product incubation. The focus should be on solving specific, high-demand problems rather than offering generic infrastructure.

Focus and Operational Challenges of Pivoting

• Operational Complexity: Mike highlights the significant operational challenges of pivoting from an infrastructure/platform focus to a product focus, or running parallel organizations. This impacts focus, speed, and internal communication.
• Zave's Emphasis on Demand: Zave stresses the importance of deeply understanding market demand. If a platform's underlying technology enables a valuable product, it might be more effective to build that product directly and "productize" the infrastructure.
• BD as an Art: Business Development (BD) in crypto, especially for platforms, is challenging. A strong product that "sells itself" reduces the need for extensive BD efforts to onboard developers.
• App Layer Opportunity: Zave argues that with robust infrastructure and middleware (e.g., Chainlink oracles, ZK proofs) now available, the biggest opportunity lies in building compelling, differentiated applications that find product-market fit (PMF).
• PolyMarket as an App-Platform: PolyMarket, an application, is evolving into a platform by attracting builders on top of it. This demonstrates how value can accrue significantly at the end-user layer, often overshadowing the underlying protocols (e.g., UMA).
• Actionable Insight: Teams must be flexible and willing to pivot based on market demand. Prioritizing PMF for a product, even if it means shifting from a platform vision, can lead to greater success and value accrual.

Bull Case for Existing Platforms & Barriers to Entry

• Increased Barriers: The conversation suggests that building a successful platform today is harder than ever, strengthening the competitive position of established players like Ethereum and Solana.
• The "Rugged" Litmus Test: Mike proposes a new heuristic: "What happens if you get rugged?" He questions the ease with which major applications like Aave or Uniswap could move off Ethereum, highlighting the deep stickiness and value accrual to the base layer.
• Facebook Analogy: Similar to how Facebook's leverage was exposed by mobile platforms (iOS/Android), crypto applications might find it extremely difficult to migrate from their foundational chains, even if theoretically "chain-agnostic."
• Lack of Migration Success: There are few, if any, examples of a major use case successfully migrating from one chain to another, even when the new chain is more optimized.
• Tempo's Challenge: Tempo, a Web2-native payments platform entering Web3, faces a "brand issue" regarding neutrality. While Stripe (a Web2 payments platform) is a strong analog, a platform built by a single entity might struggle to be perceived as neutral, a critical factor for network adoption (e.g., Visa's spin-out from banks).
• Value Accrual Shift: Zave notes that while platforms like Ethereum will continue to accrue value, there's an increasing trend of value accruing at the "end-user layer" (e.g., trading terminals taking more fees than underlying DEXes).
• Actionable Insight: Investors should recognize the high barriers to entry for new platforms, reinforcing the long-term value of established chains. Applications that move closer to the end-user and capture significant value at that layer represent a growing opportunity.

Lightning Round: Crypto Platform Litmus Test

• Miles' Assessment:
  • Yes: Ethereum, Solana
  • Middle/Limited: Hyperliquid
  • No/Not Yet: Uniswap, Morpho, Aave, Compound, Maker, Curve, Convex
  • Product-to-Platform Attempt (Tougher Spot): Circle/Tether (Plasma, ARC)
• Zave's Assessment:
  • Yes: Ethereum, Solana, Base, Hyperliquid (limited), Uniswap (more limited)
  • Maybe/Somewhat: Morpho
  • Not a Platform (Pivoting to App): Aave (seeing more value in fintechy app layer)
  • Good Question: Compound, Maker
  • Web2 Platform Analog: Tempo (potential "sick platform" in Web3)
• ChatGPT's View: Ethereum is the only "true platform," with Solana being "product first." Base is heavily shaped by Coinbase.

Conclusion: The crypto platform landscape is maturing, demanding strategic shifts from generic infrastructure to product-led or highly opinionated approaches. Investors and researchers should prioritize projects demonstrating clear user demand, differentiated wedges, and the ability to capture value at the application layer, while recognizing the enduring stickiness and high barriers to entry for established base layers.