Protocols provide structure for businesses, but are not businesses themselves; they are systems of logic that coordinate exchange between suppliers (businesses) and consumers of a service. As coordinators of exchange, protocols should be minimally extractive, whereas businesses are incentivized to be maximally extractive (that’s profit, and a business is valued as a multiple of its profit).
From this angle, protocols can be seen as routers of economic activity. Just as the routers of the internet are as lean and efficient as possible, so too should crypto’s protocols trend.
The less extractive a protocol is in coordinating exchange, the more that form of exchange will happen. Matt Ridley argued that the emergence of exchange is what allowed humans to unlock the magic of competitive advantage, and its associated innovation and progress. If that’s the case, facilitating exchange is a sacred position in society.
To avoid confusion, I should note minimal extraction doesn’t mean cryptoassets that capitalize protocols will capture minimal value; if something is minimally extractive, but globally produced and consumed, the coordinating asset can capture a significant amount of value.
Turning to how the market values the cryptoasset, it depends primarily on the governance, the supply-schedule of the asset, and how value flows to suppliers (note that the governance can change the design of the other two variables).