Jill Gunter

Interoperability: Crypto’s Unstoppable Network‑Effect Business Model

Network effects or bust. The best business model in crypto is and always has been interoperability. Interop sounds like a tired category right now because of the boom (and subsequent consolidation) of so many projects classed as "interop" protocols over the past few years (from message-passing, to bridging, to preconfs, even alt L1s). But whatever your angle and whatever you call it, the only thing worth working on is the product that will be instrumental to facilitating flows between every chain / app / L2/ environment. Why? Because this is the thing that cannot just be ripped and replaced. Or as Reid Hoffman put it: “The magic of network effects is that they generate a positive feedback loop that results in superlinear growth and value creation. This superlinear effect makes it very difficult for any node in the network to switch from an incumbent to an alternative (“customer lock-in”), since it is almost impossible for any new entrant to match the value of plugging into the existing network.” The only lock-in to be found in the open source, easy-to-migrate, hyperchurn world of crypto is in facilitating access to liquidity, users, and state. This is what Near is figuring out with Near Intents. This is what Ethereum dominated for so long and why it's retained status as the market leader, despite lagging on core metrics like speed and throughput. This is what Monad is now trying to compete on. And this is what Espresso aims to provide by tunneling under every other protocol. The key to interop is and always has been speed. If you can solve for fast transaction confirmations across every chain, then interop is solved. And if you are the one providing that, then you've got yourself a network effect.