I don’t quite understand the fundamentals of this notion.

He’s saying that the most direct way to benefit from the growth of Augur and the pricing of the REP token, is by directly participating in the REP market (through purchase or gain of REP) rather than by purchasing Ether in the hope that Augur’s increased use will positively impact the price of Ether, as there are many more variables impacting it.

In other words, using a fat protocol investment methodology means you diversify so much that you may not capture the value you think you’ve spotted. He’s suggesting to invest in the dApp’s tokens directly rather than invest in the protocol layer.

If you’re truly confident in a dApp it’s plausible that you’ll get higher gains by investing directly, however as far as I’m aware no dApps have captured significant market share yet and thus it may be wise to invest in the fat protocol as long as you do research about whether the application actually increases the value of the underlying protocol’s currency / token.

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