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"The best distributors/aggregators/market-makers win by providing the best experience, which earns them the most consumers/users, which attracts the most suppliers."

— Ben Thompson

Control demand, win everything

Ben Thompson’s aggregation theory explains a surprising number of things.

It’s why newspapers are near extinct, for example: Google aggregates our shopping queries and sells access to them, making newspaper ads obsolete.

It’s also why social media has reshaped the world: Facebook aggregates our attention and sells access to it, turning publishers into commoditized content suppliers.

In both cases, the aggregator is all-powerful because it owns the user relationship.

This may also be the best way to understand current events: President Trump believes he can effectively tax other countries because he controls their access to the US consumer.

"The power of an aggregator," Ben Thompson explains, "is that you deliver so much demand that suppliers have to come to you on your terms even though you hate it."

The rest of the world hates US tariffs, but President Trump thinks they’ll cut prices and keep selling to us anyway because the US consumer is so valuable.

I’m not convinced they will because there are limits to an aggregator’s leverage — if Google tried charging for its search engine, for example, people would find alternatives.

But that might be the best way to understand the bet that the president is implicitly making.

Lots of crypto bets can be understood this way, too.

People seemed surprised to see in Circle’s recent S-1 form filing that it pays Coinbase and Binance to hold USDC.

But of course it does — Coinbase and Binance have a relationship with their customers and Circle does not. 

(And can’t — if it did, it’d have to KYC them.)

Coinbase is the gatekeeper to its 100 million customers, which is why it can charge as much as 0.6% on crypto trades — 4x more than the 0.15% that Apple takes on payments made with Apple Pay and infinity times more than the 0% that retail brokers like Vanguard take on stock trades.

The fact that Coinbase users are willing to pay so much more suggests that aggregation theory applies in crypto, and maybe even more so than normal. 

But it might only be centralized crypto that can monetize its users like that — or at all. 

For example, the centralized entity of Uniswap Labs (the software company that created the Uniswap protocol) makes money by charging transaction fees on the Uniswap website that it owns.

But the Uniswap protocol does not make money because its token holders fear that implementing a fee of even 0.05% will cause users to go elsewhere.

Or, as Ben Thompson would likely frame it: Uniswap Labs makes money because it aggregates demand for the Uniswap protocol — the protocol does not, because it doesn’t "own" the users. 

This framing might also explain why Ethereum has been such a disappointing investment of late.

Ethereum’s "roadmap" has intentionally pushed users to cheaper, faster layer-2 blockchains in the hope that the base layer (Ethereum itself) would benefit by taking a small cut of the increased transaction volumes that would enable.

But, as Nick White warned on the Expansion podcast, "taking [a] rake off other people’s applications and work is fundamentally a doomed business model."

Ethereum has become a supplier (of blockspace) that takes a cut of other people’s applications and aggregation theory states that that is not a good business to be in — it’s like trying to sell newspapers after all the ads have moved to Google and TikTok.

Before the internet, the best businesses captured profits by controlling supply: Newspapers were highly profitable because advertisers needed them to deliver their ads to people’s homes.

After the internet, the best businesses capture profits by controlling demand: Platforms like Google and Facebook became dominant because suppliers (like newspapers) needed them to reach the users who were no longer coming to them directly.

In other words, "value has shifted away from companies that control the distribution of scarce resources to those that control demand for abundant ones," as Ben Thompson explains it.

In crypto, users are the scarce resource. 

Blockspace, tokens and exchanges are the abundant ones.

Free at last

Right now, crypto’s users are controlled by the likes of Coinbase, Binance, Uniswap Labs and the Telegram trading bots that are so popular they take a 1% cut of every trade they process.

Longer term, however, I wonder if there will be any aggregators in crypto at all.

Circle pays Coinbase to hold USDC, but Coinbase passes almost all of that on to users — presumably to keep them from switching to newer crypto providers like Robinhood or even Fidelity.

Switching risks are even higher in decentralized crypto because switching stablecoins is infinitely easier than switching checking accounts and switching digital wallets is infinitely easier than switching brokerage accounts.

That’s partly because creating those services is so much easier than creating their non-crypto equivalents. 

When pump.fun, a token launchpad, created an exchange to steal business from Raydium, Raydium, an exchange, responded by creating a token launchpad to steal business from pump.fun. 

In TradFi terms, this is as if Intel developed an operating system to steal business from Microsoft and Microsoft responded by building a semiconductor factory.

That wouldn’t happen because creating operating systems and semiconductor factories is hard. 

But creating things in crypto is easy.

And, with AI now writing the code, it’s getting easier.

Soon, crypto users might not know what blockchain they’re using — or even that they’re using crypto at all.

If so, Ben Thompson’s theory of aggregation will explain a lot of things.

— Byron Gilliam

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ZKsync is accelerating institutional blockchain adoption and the rise of tokenization.

Institutions choose ZKsync to move tokenized assets securely across enterprises while preserving privacy and governance.

With gasless transactions, seamless onboarding, and scalable ZK infrastructure, enterprises can transfer financial products and data privately using ZK Stack — an open-source, trustless blockchain platform designed for speed, low costs, security, and interoperability without sacrificing control.

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2. Canada again set to beat US to milestone crypto ETF launch

3. Movement Labs, Foundation conducts ‘investigation’ into ‘market maker abnormalities’

4. Janover Inc. set to receive some of Kraken’s staked SOL

5. [Sponsored] WalletConnect unlocks transferability of WCT token

The BPI’s Plan To Make America a Bitcoin Nation

Grant McCarty of the Bitcoin Policy Institute discusses his early political engagements and origins of BPI, challenges and opportunities around implementing crypto legislation, and the Strategic Bitcoin Reserve. 

Listen to Supply Shock on Spotify, Apple Podcasts or YouTube.

_{Brought to you by:}

ZKsync is accelerating institutional blockchain adoption and the rise of tokenization.

Institutions choose ZKsync to move tokenized assets securely across enterprises while preserving privacy and governance.

With gasless transactions, seamless onboarding, and scalable ZK infrastructure, enterprises can transfer financial products and data privately using ZK Stack — an open-source, trustless blockchain platform designed for speed, low costs, security, and interoperability without sacrificing control.