Authors: Lasse Clausen, Christopher Heymann, Robert Koschig, Clare He, Johannes Säuberlich
Translation: Shan Ouba, Golden Finance
Eight Core Points
On-chain revenue has become a $20 billion economic pillar.
Decentralized finance will dominate on-chain earnings by 2025.
Blockchain technology is maturing, transaction costs are decreasing, driving explosive growth in applications with a year-on-year increase of 126%.
Asset prices are obvious revenue drivers, but cost-effective infrastructure is also playing an important role today.
Although the top 20 protocols contribute 70% of the revenue, innovators can still disrupt existing players at an unprecedented speed.
Despite applications performing better than blockchain in "revenue and valuation correlation," blockchain still dominates in market capitalization.
Asset tokenization, DePIN, wallets, and consumer applications are high-growth areas worth watching.
If regulations become more favorable, on-chain fees are expected to achieve a 60% year-on-year growth by 2026, surpassing $32 billion, with all growth contributed by the application side.
This report compiles on-chain fee data from over 1,000 protocols for the first time, analyzing industry trends, revenue drivers, fee distribution, and valuation impacts. The fees paid by users remain the clearest signal of the value created by protocols, but the specific context is also crucial:
At the peak of the 2021 bull market, quarterly on-chain fees reached $9.2 billion, primarily contributed by a few proof-of-work (PoW) blockchains; Ethereum alone accounted for about 40%, during a time of strong market speculation when users were insensitive to high transaction fees.
By 2025, various networks will optimize efficiency, reducing transaction costs by about 90%, promoting the adoption of applications, and enabling sustainable monetization on blockchain infrastructure. At the same time, regulatory barriers to investor participation are also decreasing.
These changes collectively mark a more mature stage for the monetization of digital assets—where the growth of protocol value creation and investment viability increasingly converge. As shown by the light blue curve, the value distributed to token holders is at a historical high, indicating that efficiency improvements have created conditions for revenue distribution. Therefore, this is a critical time for investors to focus on the maturation of protocol monetization.
On-chain Revenue Has Become a $20 Billion Economic Pillar
What is the scale of on-chain fees?
According to data at the end of the third quarter, on-chain fees are expected to reach $19.8 billion by 2025, a year-on-year increase of 35%, but still 18% lower than the levels in 2021.
On-chain fees in 2025 will grow more than tenfold compared to 2020, with a compound annual growth rate (CAGR) of about 60%.
In the first half of 2025, users paid $9.7 billion in on-chain fees, a year-on-year increase of 41%, setting a historical record for the same period.
2021 remains the overall peak (mainly driven by the second half), after which the industry landscape underwent significant changes, so this report will frequently review data from the second half of 2021.
Why are the on-chain fees paid by users crucial?
1. Establishing the status of protocol tokens as an investable asset class
Currently, digital tokens are still often misunderstood as speculative tools for retail investors. This report argues that if networks can achieve product-market fit and establish sustainable business models, tokens are likely to upgrade to an investable asset class aimed at a broader and more mature market participant base.
We view the fees paid by users as the best indicator, as they reflect the willingness of users and businesses to pay for reusable utility functions. As protocols mature and regulations improve, the ability to generate and distribute stable fee income will become a key criterion for distinguishing "networks with long-term viability" from "early experimental projects."
Today, over 80% of on-chain fees come from tokenized protocols, which provide global, permissionless investment channels. In contrast, channels for obtaining off-chain revenue are often limited to mature publicly listed companies or private investment tools.
2. The increasing importance of on-chain activity and efficiency
Although on-chain fees still account for a relatively low proportion of total industry revenue, they clearly reflect application adoption rates and long-term value creation: from the beginning of 2025 to now, nearly 400 protocols have annualized over $1 million, and 20 protocols have distributed over $10 million in value to token holders.
This achievement is attributed to the global reach and continuously improving efficiency of blockchain, allowing applications to quickly achieve scalable profitability (see subsequent sections of the report for details).
This advantage has led on-chain players to capture market share from off-chain competitors; for example, decentralized exchanges currently account for 25% of total cryptocurrency trading volume, while many high-growth business models like DePIN also rely on on-chain infrastructure support.
3. The transparency advantage of on-chain fees
Transparency is a core principle of blockchain—"no trust, just verify." Unlike traditional finance, which delays information disclosure, on-chain financial data is real-time and verifiable.
For protocols issuing tokens to attract global investors, this transparency is crucial: investors expect verifiable business metrics. Nowadays, more and more protocols disclose revenue information or reflect performance through on-chain mechanisms, even if some revenue comes from off-chain.
Digital asset revenue is not limited to on-chain fees, but driven by the maturity of blockchain technology, on-chain fee growth is the most rapid:
- On-chain fees ($9.7 billion): The 41% year-on-year growth includes two opposing trends:
The blockchain has moved past the "high cost, low transaction volume" phase, becoming standardized infrastructure, with efficiency improvements driving steady fee declines ²;
The application side benefits from this shift, rapidly scaling on lower-cost, higher-efficiency infrastructure, with a year-on-year growth of 126%.
- Off-chain fees ($23.5 billion):
Centralized exchange (CEX) revenue accounts for the highest proportion, expected to reach $19 billion;
The remaining portion mainly comes from other financial infrastructure (market makers, fund asset management fees, etc.) and cryptocurrency casinos ³.
- Other revenue ($23.1 billion): Mainly divided into two parts:
Block rewards received by blockchain miners and stakers: Bitcoin contributes $8 billion, Solana contributes $2 billion, and Ethereum contributes $1 billion, accounting for the highest proportion;
Stablecoin issuance revenue: Circle and Tether earn $4.5 billion through the assets backing their stablecoins (such as U.S. Treasury bonds).
DeFi Will Dominate On-chain Earnings by 2025
Where do on-chain fees come from?
In the first half of 2025, of the $9.7 billion in on-chain fees earned by protocols, DeFi accounted for the highest proportion:
63%: DeFi/Financial: Mainly from trading fees of DEX, perpetual contracts (Perps), and derivatives platforms;
22%: Blockchain: Mainly includes Layer 1 (L1) transaction fees and maximum extractable value (MEV) capture; Layer 2 (L2)/Layer 3 (L3) fees still account for a low proportion;
8%: Wallets: Since the fourth quarter of 2024, swap transactions have generated considerable fees for wallets, with Phantom contributing 30% of all wallet fees;
6%: Consumer: Over 80% comes from launchpads (with Pump.fun accounting for 60% of fees in this area), 8% from casinos, and 4% from creator economy and social applications;
1%: DePIN: Although small in scale, it has the fastest growth rate (over 400% year-on-year);
1%: Middleware: 55% comes from cross-chain bridges (led by Li.fi), 15% from identity and reputation services, and 15% from developer tools.
Blockchain fees are expected to account for less than 20% by 2025
In 2021, users paid $13.4 billion in fees for blockchain transactions, accounting for 56% of total fees;
As on-chain fees overall rebound in 2024, the dominant position of blockchain fees has been replaced by DeFi/financial applications; by 2025, fees from DeFi/financial applications are expected to reach $13.1 billion, accounting for 66% of total fees;
DeFi/financial applications continue to grow strongly, with a year-on-year increase of 113% in the first half of 2025, setting a historical high for on-chain fees—specific driving factors are detailed below.
New Historical Peak: On-chain Fees in the First Half of 2025 Exceed the Second Half of 2021
The expansion of new use cases and the growth of stablecoins drove on-chain fees in the first half of 2025 to surpass the peak in the second half of 2021:
- Mature categories: Fees grew by about 4%;
DEX, perpetual contracts, and derivatives platforms in the DeFi sector are capturing market share from CEX ¹;
Perpetual contract platforms led by Hyperliquid have seen fees double and trading volume increase fivefold year-on-year;
Lending fees remain stable at around $700 million, with new players like Morpho gaining market share through improved efficiency.
Stablecoins: Although not an emerging category, stablecoin-related on-chain fees have also set records as market capitalization ² reaches new highs and the monetization ability of off-chain collateral improves.
Other emerging use cases: Contributing $1.1 billion in fees, including automated/decentralized artificial intelligence (DeFAI, such as robots and AI agents), risk management and vaults, real-world assets (RWAs), and liquid staking—these use cases generate fees through user deposit revenue sharing.
CEX has lower transparency in revenue achieved through token buybacks: buybacks should reflect revenue/profit, but verification is difficult. Binance and Bitget no longer link buybacks to revenue, and OKX's actual buyback scale may not have reached the announced level, so this report does not include such data; 2) As of the end of the third quarter of 2025, the market capitalization of stablecoins is close to $300 billion.
In the first half of 2025, DeFi/financial fees increased to $6.1 billion (a year-on-year increase of 113%), with core categories (DEX, perpetual contracts, derivatives platforms, lending) contributing $4.4 billion. The growth mainly comes from previously low-revenue new players:
DEX: Growth is led by Raydium and Meteora, both benefiting from the explosion of the Solana ecosystem; meanwhile, Uniswap, which previously ranked third, has lagged in growth, with market share dropping from 44% to 16%;
Perpetual contracts/derivatives: Jupiter's fee share increased from 5% to 45%; Hyperliquid, which has been online for less than a year, currently contributes 35% of fees in this segment;
Lending: Aave still maintains dominance, but the lending aggregator Morpho, built on Aave, has increased its fee share from nearly 0% in the first half of 2024 to 10%.
Four Key Trends in Blockchain Fees
Efficiency improvements: Especially in Ethereum, which has reduced overall fee revenue by lowering transaction costs (see Chapter (04) for classification details);
MEV: The Flashbots protocol has begun coordinating so-called MEV transactions on Ethereum, and Jito has launched similar operations on Solana. These fees are related to arbitrage opportunities, so during speculative active periods (such as the meme coin craze from the second half of 2024 to the first quarter of 2025), revenues will surge;
Concentration: In the first half of 2025, the top 5 protocols (Tron, Ethereum, Solana, Jito, Flashbots) accounted for about 80% of blockchain fees. Although concentration remains high, it has improved compared to 2021—when Ethereum alone accounted for 86% of blockchain fees;
Rollup (L2/L3): Emerging in 2022, fees are much lower than L1, but current transaction volumes are still insufficient to support a significant fee share ¹.
The leading L2 is Base: On-chain fees in the first half of 2025 are approximately $39 million.
Blockchain Technology is Maturing, Transaction Costs are Decreasing, Driving Explosive Growth in Applications with a Year-on-Year Increase of 126%
Fees and Value: Are We Creating Real Economic Value?
In the first half of 2025, the fees paid by users were 34% lower than the historical peak in the second half of 2021, but the efficiency improvements in blockchain have spurred more activity:
In 2021, Ethereum alone contributed over 40% of on-chain fees; by the beginning of 2025, its share has dropped to 3%—Ethereum's scaling efforts are the main reason for the 86% decline in average blockchain transaction fees;
The daily transaction volume of blockchain L1 and L2 has increased by about 2.7 times, reaching 169 million transactions;
The number of protocols achieving monetization is unprecedented: only 125 protocols generated fees in 2021, with almost all fees coming from 20 protocols ¹; in contrast, in the first half of 2025, 969 protocols generated fees, an eightfold increase over four years;
The value distributed to token holders has increased: although fees are lower than in 2021, the value currently distributed to token holders has increased by 50%, reaching a historical high;
This development is accompanied by a regulatory environment friendly to digital assets and value distribution that began at the end of 2024.
In the second half of 2021, the top 20 protocols accounted for 94% of fees; in the first half of 2025, this proportion has dropped to 69%.
Significant Improvement in Blockchain Efficiency, Achieving High Throughput and Low Costs
Average transaction fees have decreased by 86%, primarily driven by Ethereum (accounting for over 90% of the total decline), due to the implementation of Ethereum's new fee mechanism (EIP-1550) and increased adoption of L2.
Cost reductions have driven increased participation:
Daily transaction volume has grown 2.7 times compared to the second half of 2021, with an increased share of L2;
Similarly, the average monthly number of trading wallets in the first half of 2025 has increased 5.3 times, reaching 273 million.
In 2025, our dataset includes 1,124 protocols generating on-chain fees ¹:
Among them, 389 protocols generated fees for the first time in 2025 ²; as of the beginning of 2025, these protocols have contributed 13% of total fees, with a share of 17% in third-quarter fees;
Typical representatives among this batch of protocols include:
Meteora (ranked first in total fees in the first half of 2025)
Axiom
Bullx
Trojan
2025 is the inaugural year for "non-DeFi/financial new protocols" to occupy a significant share of monetization: among the 150 newly added "other field" protocols in 2025, DePIN and consumer protocols account for the highest proportion.
Data is as of the third quarter of 2025; in the third quarter of 2025 alone, there were 1,053 protocols generating fees; 2) Specifically, the fee data for these protocols is now available for the first time.
Value Distributed to Token Holders
After deducting buybacks, burns, and other accrued items, and subtracting the "net value" after token issuance, the past three quarters have all reached historical highs:
The value distributed in the third quarter of 2025 reached $1.9 billion, roughly equal to the total distribution amount during the peak fee period in the second half of 2021;
However, many protocols still have a distribution amount of zero—new networks' token incentive issuance scale still exceeds the value returned to holders, which is more common in blockchain L1;
The application side is the main contributor to value distribution, thanks to the reduction of incentive measures: the token incentives of leading applications ¹ have decreased from $2.8 billion in the second half of 2021 (accounting for 90% of their fees) to less than $100 million in the first half of 2025, significantly enhancing net returns to holders.
It should be noted that "value distribution" and other profit-based metrics have limitations, especially regarding the question of "which holders benefit (active holders vs. passive holders)." For details on the methodologies and metrics adopted by the industry, please refer to page 51 and subsequent content of the downloadable report.
More Efficient Infrastructure is Becoming a New Driving Force
What are the Fee Drivers?
Asset prices are the input variable for fees denominated in dollars in most areas, so there is an expected correlation between the two, but the drivers are not limited to this:
Seasonality: Changes in market risk appetite can lead to cyclical fluctuations in token prices, thereby affecting fee levels;
Causality ¹: This relationship varies by time and field. In the DeFi/financial sector (with stronger correlation since 2022) and the blockchain sector (where there has only been a one-month lag since 2021), fee changes tend to lead valuation changes;
Industry dynamics:
Blockchain L1: In 2021, it was mainly price-driven, but now, due to efficiency improvements, the impact of transaction costs is greater;
Trading platforms (DEX, perpetual contracts, etc.): Still driven by asset prices, but with increasing competition on both supply and demand sides, fee rates have decreased;
Lending: Fees are driven by capital utilization rates, which are positively correlated with prices but constrained by interest rate mechanisms;
DePIN: Fees are linked to the dollar value of the services provided, with lower sensitivity to asset price fluctuations.
Ethereum Fee Dynamics Have Changed Significantly Since 2021
In the second half of 2021, Ethereum fees reached a record of $6.3 billion, driven by high ETH prices and speculative demand, with users showing a high tolerance for extremely high fees at that time.
By the first half of 2025, ETH prices and trading volumes were similar to 2021 levels, but scaling measures ¹ reduced average fees by about 95%, leading to a significant decline in fee revenue measured in dollars.
This change had a positive impact on trading activity and inflation:
Validator incentives were simultaneously reduced—from $9.4 billion in the second half of 2021 to $1.2 billion in the first half of 2025 (a decrease of 90%), thus the supply of ETH tokens has remained stable since the end of 2022;
Although Ethereum's own trading volume has only slightly increased, the current trading volume of L2 is now 18 times that, with an average daily trading volume of about 22.9 million transactions in the first half of 2025.
As we shift towards proof of stake, Rollup, dynamic fees, capacity enhancements, and transaction bundling.
Uniswap, as the first mainstream decentralized exchange, has long been a leader in trading volume and fee capture, but in the first half of 2025, its fees measured in dollars decreased by 18% year-on-year, primarily due to a reduction in average fee rates:
During this period, the average price of traded assets increased ¹, which should have had a positive impact on fees;
Swap fee rates range from 5 to 100 basis points, but trading volume has gradually shifted towards lower-fee liquidity pools, resulting in an average fee rate decline of over 30%;
In the second quarter of 2025, trading volume increased by 20% year-on-year, reaching about $230 billion, but this growth was mainly driven by price (with greater increases in crypto asset prices), so the asset trading volume, when price-normalized, actually saw a slight decline.
Other DEXs are also facing similar fee compression issues. However, PancakeSwap offset the impact of declining fees by increasing trading volume, achieving approximately 150% year-on-year growth in fees.
Despite the top 20 protocols contributing 70% of revenue, leadership is constantly shifting
Who is Leading? Top Fee-Generating Protocols
Consistent with industry proportions, top protocols are mainly concentrated in DeFi/financial and blockchain categories:
Exceptions include consumer-oriented Pump and wallet-oriented Phantom, but some protocols generate fees from multiple areas (e.g., Meteora operates a token launchpad, which falls under the consumer category);
The top 20 protocols (accounting for 2% of the total) contribute 69% of fees, a concentration typical in the digital asset market;
Some protocols (like Uniswap, Aave, and all blockchain protocols) have been operating for many years, while protocols like Pump, Photon, and Axiom have been operational for less than 2 years;
High Concentration of Fee Generation
In most areas, the top 5 protocols capture over 80% of fees (with even higher proportions in DePIN and wallet sectors), corresponding to the dark blue bars;
The concentration in the DeFi/financial sector is lower: the top 5 protocols account for 41%;
However, top positions are not fixed:
Each quarter, a maximum of 25% of the top 20 fee-generating protocols may be replaced;
The fee share of the top 5 protocols in 2025 is significantly lower than a year ago (as indicated by the light blue bars), with the DePIN sector in the chart being a typical example.
Overall Growth in DEX Fees, with Q4 2024 Setting a Quarterly Record
Recent growth has been primarily driven by DEXs in the Solana ecosystem, such as Meteora and Raydium:
A year ago, the fee scale of these DEXs was negligible; now, Solana ecosystem DEXs are not only expanding market share but also driving overall on-chain fee pool growth;
Other protocols like Pump.fun are also launching new DEXs and quickly achieving high fee revenues;
As a former top player in the DEX space, Uniswap's absolute fee scale remains stable, but its market share has declined due to its lack of presence in the Solana ecosystem;
In contrast, PancakeSwap on the BNB Chain has achieved fee growth by increasing trading volume and has jumped to the top of the fee revenue rankings in the third quarter of 2025.
Among the over 1,000 protocols we analyzed, 71 protocols have annualized on-chain revenues exceeding $100 million, with 32 protocols achieving this goal within a year of launch, a growth rate comparable only to leading AI breakthrough projects like Cursor. Typical examples include:
Blockchain: Base, Filecoin, Linea
DePIN: Aethir
DeFi/financial: Ethena, GMX, Virtuals, Sushiswap
Wallet/interface: Axiom, Moonshot, Photon
Consumer: Friend.tech, LooksRare, Pump.fun
Many protocols' early fee growth relied on incentive measures, such as LooksRare generating $500 million in fees within the first three months of launch while also distributing an equivalent amount in rewards.
Notably, among the 71 protocols, 16 were launched after June 2023, and all but Base are application-oriented protocols. This phenomenon highlights both the concentration of fee generation and indicates that mature infrastructure is accelerating the disruption of existing players by innovators.
Ethereum is the first publicly investable asset to exceed a market capitalization of $500 billion within six years (during the 2021 bull market):
Similar to Bitcoin, Ethereum has had global accessibility since its inception;
Before reaching this valuation, Ethereum's annualized fees had already surpassed $1 billion, achieving $100 million ARR in just 2.5 years;
Although Ethereum's fee revenue has since declined, its annualized fee peak in the fourth quarter of 2021 was close to $15 billion;
Only energy companies can match the speed at which Bitcoin and Ethereum achieved a $500 billion valuation—Meta, as the fastest-growing tech company, took 13.5 years to reach this goal.
Application Layer Revenue is More Strongly Correlated with Valuation, but Public Chains Still Dominate Total Market Value
Is the Market Overlooking Something? The Relationship Between On-Chain Fees and Valuation
Among the protocols generating fees, blockchain protocols dominate valuation—of the $1.2 trillion market capitalization we calculated (excluding Bitcoin), blockchain protocols account for 91%:
Only Ethereum, XRP, Solana, and BSC account for about 80% of the blockchain market capitalization;
DeFi/financial protocols account for 6%: the perpetual contract DEX Hyperliquid, which has been online for less than a year, has quickly taken the lead in both valuation and fees;
The combined market capitalization of all other sectors is less than 2%;
Due to significant differences between fee share and market capitalization share, the "price-to-fee ratio" (market capitalization divided by annualized fees) varies greatly across sectors: this ratio for L1 blockchain protocols can reach thousands of times, while for other sectors, it is only 10-100 times (see the next chart).
This gap reflects the market participants' valuation premium for L1 blockchains—similar to Bitcoin, whose value is not limited to fee generation.
Divergence Between Valuation Share and Fee Share
Although the fee share of blockchain protocols has decreased from over 60% in 2023 to 12% in the third quarter of 2025, their valuation share in the "total market capitalization of fee-generating protocols" remains above 90%; in contrast, DeFi/financial protocols contribute 73% of fees, but their market capitalization share remains well below 10%.
Price - Fee Ratio (P/F)
The Price - Fee Ratio is defined as "fully diluted market capitalization divided by annualized fees." This ratio for blockchain protocols is significantly higher than for application protocols, reflecting the divergence between valuation and fee generation mentioned earlier:
Blockchain: The median P/F ratio in Q3 2025 is 3,902 times (approximately 7,300 times for L1 blockchains);
DeFi/Financial: The median P/F ratio is 17 times (14 times for DEXs, 8 times for lending);
The range of ratios within each sector is quite broad; for example, the interquartile range for blockchain in Q3 2025 is 1,000-12,000 times, but it has generally remained within this wide range over the past three years;
DePIN is an exception: its median P/F ratio has dropped from about 1,000 times a year ago to 211 times.
Not all tokens correspond to fee-generating protocols, so these tokens are excluded from the "Fee - Valuation Comparison." In Q3 2025, the market capitalization of such tokens accounted for 66%:
58% is Bitcoin: positioned as "digital gold." Although the Bitcoin blockchain generates fees, its impact on valuation is minimal ¹;
7% is stablecoins/tokenized assets: mainly stablecoins; the income generated from reserve assets is not fees paid by users and does not belong to the holders of these tokens;
1% is meme coins ²: driven by speculative trading, with no cash flow support;
An additional 4% of market capitalization is excluded due to "no fee data" or "not generating fees";
Ultimately, we selected a market capitalization of $1.2 trillion (accounting for 30% of total market capitalization) as the basis for the "Fee - Valuation Comparison" analysis.
It is important to note that some fee-generating protocols have not issued tokens, so there is no valuation data. In the first half of 2025, these protocols contributed 24% of total fees, with Meteora, Phantom, Axiom, Photon, and Flashbots accounting for about 60%.
As Bitcoin mining rewards decline exponentially, miners' fee income (used to secure the Bitcoin network) may gradually impact its valuation; meme coins like Dogecoin, which are "meme coins as blockchain-native tokens," are still included in the analysis because their associated protocols generate transaction fees.
Tokenization, DePIN, Wallets, and Consumer Categories Are High-Growth Areas
Which Areas Will Drive the Next Wave of Growth?
- Tokenization of Real-World Assets (RWAs)
RWAs are the smallest sub-sector in DeFi in terms of fee scale, but they have significant growth potential:
The on-chain value of RWA assets has doubled year-on-year, with a compound annual growth rate (CAGR) of 235% over the past four years;
On-chain fees have even outpaced the growth rate of asset values: fees in Q3 2025 increased 50 times year-on-year, despite a low base (only $15 million);
These fees mainly come from asset management fees (AUM) sharing, transaction fees, or management fees;
Thanks to favorable regulations (more asset classes opening for tokenization), RWA AUM growth ², and more off-chain value "going on-chain," fees are expected to continue to grow;
It should be noted that some large RWA protocols, such as the BlackRock BUIDL fund, are not included in the on-chain fee statistics.
2. Decentralized Physical Infrastructure Networks (DePIN)
Aside from early projects like Helium, Akash, and Arweave, DePIN remains a relatively emerging field. Over the past year, the monetization scale in this area has significantly increased:
Fees have increased about 4 times year-on-year, primarily driven by Aethir and IO.Net;
Aethir, which provides GPU computing services, holds a significant share in this field, but its fees are generated from token buybacks;
Although Aethir and IO.Net saw a slowdown in growth in Q3 2025, the overall growth trend in the sector remains clear ¹, and more revenue is expected to go on-chain in the coming quarters;
The World Economic Forum predicts that by 2028, the valuation of the DePIN sector will reach $3.5 trillion (an increase of about 90 times from 2025), indicating that the recent rapid growth is likely to continue.
3. Wallets and Trading Interfaces/Applications
Wallets and trading interfaces/applications directly connect with users, primarily monetizing on-chain through additional fees from swap transactions:
Since Q4 2024, as the activity in the Solana ecosystem has surged, Phantom's fee contributions have significantly increased;
Coinbase Wallet has maintained monthly fee revenues of $5-15 million since December 2024, gradually increasing its market share;
As Phantom and Coinbase Wallet enter the fee-generating space, Metamask's market share has declined;
In 2024, interfaces like Photon, which focus on trader-friendly user experiences (UX), emerged;
In Q2 2025, the market downturn also led to a decrease of about 60% in wallet fees (quarter-on-quarter).
4. Consumer: Launchpad
In the second half of 2024, fees in the Launchpad sector surged, with Pump.fun's on-chain fees reaching about $250 million in Q1 2025;
In Q2 2025, other platforms like Meteora (based on the Believe ecosystem) also began monetizing, capturing market share;
The Launchpad sector shows potential for rapid scaling of fees, but historical experience should be heeded: from 2021 to early 2022, fees for gaming (Axie, Sandbox) and creator economy (Opensea, LooksRare) protocols also surged sharply, followed by a significant decline.
On-chain fees are expected to achieve a 60% year-on-year growth in 2026, with all growth attributed to how application-layer on-chain fees will trend in the future.
Baseline scenario forecasts indicate that on-chain fees will exceed $32 billion in 2026, representing a year-on-year increase of 63%, continuing the trend of "application-driven growth":
Blockchain: Growth potential is limited; the impact of efficiency improvements will largely offset the increase in activity, and deviations will mostly be driven by market factors (e.g., the "meme coin craze" of 2024-2025);
DeFi/Financial: Will continue to expand (year-on-year growth exceeding 50%), although affected by asset price fluctuations, emerging sub-sectors will provide support;
Emerging sectors:
RWAs: On-chain fees are expected to reach $500 million in 2026 (a tenfold year-on-year increase), primarily relying on AUM growth expectations;
DePIN: Expected to exceed $450 million, maintaining triple-digit growth;
Wallets: Growth slightly higher than DeFi (50%);
Consumer: Year-on-year growth of about 70%, but with a large two-way margin of error;
- Middleware: Growth of 50%, as many protocols are about to start monetizing or increasing monetization scale (e.g., Wallet Connect).
Application fees surged in 2021 alongside blockchain fees, but recent on-chain fee growth has been entirely driven by application fees, a trend expected to continue:
- Emerging sectors like RWAs, DePIN, wallets, and consumer categories saw year-on-year fee growth of triple digits in the first half of 2025 (red line), and a further year-on-year increase of around 70% is expected in 2026;
By 2025, the number of consumer and DePIN protocols achieving monetization has begun to increase (the dark line in the chart), and this trend will continue across all application sectors;
The value allocated to token holders almost entirely comes from the application side (light blue line), and favorable regulations will further reinforce this trend.
Regulatory Environment 180-Degree Shift
Regulatory agencies are adjusting their strategies, sending friendly signals for digital assets:
Increased clarity in DeFi application regulation: policies such as the "Markets in Crypto-Assets Regulation" (MiCA) and the "Genius Act" have been introduced;
Continuous improvement of frameworks: the "Clarity Act" has been implemented, and the U.S. Securities and Exchange Commission (SEC) has shifted to a "rule-making priority" approach, replacing the previous "enforcement priority";
As regulatory agencies and elected officials deepen their understanding of blockchain technology, relevant laws and regulations will better align with the actual needs of the industry. The new chair of the U.S. SEC has prioritized cryptocurrency and tokenization as key tasks.
The current regulatory environment in the U.S. shows signs of mainstream adoption:
Tokenized funds: BlackRock's BUIDL fund (tokenized through Securitize);
Tokenized stocks: For example, Galaxy's $GLXY stock (tokenized through Superstate);
Robinhood announced plans to launch its own L2 for RWAs;
The U.S. Depository Trust & Clearing Corporation (DTCC) announced plans to tokenize its clearing operations;
The popularity of Digital Asset Treasury Companies (DATs) is surging;
However, tax laws remain a barrier to on-chain capital flows: the movement of on-chain value and fee generation are still affected by the ambiguities in U.S. tax law, such as the following unresolved questions:
Should the token "wrap/unwrap" be taxable?
Is there a difference in the tax treatment of yield-bearing liquid staking tokens (LSTs, such as stETH) versus cumulative LSTs (such as wstETH)?
Should staking rewards be recognized as income "when accrued" or "when received"?
Conclusion and Outlook
In the first half of 2025, on-chain fees paid by users reached $9.7 billion, marking the second-highest record since the second half of 2021. The fee growth in 2021 relied on billions of dollars in user incentives, related speculative activities, and a few high-cost PoW blockchains;
Today, fees are primarily generated from the application side — financial use cases dominate, but DePIN, wallets, and consumer applications are rapidly expanding (all achieving over 200% year-on-year growth);
Despite increased throughput, blockchain fees remain stable, as efficiency improvements have reduced unit costs — this trend also extends to DEXs and other mature protocols, creating conditions for rapid scaling and profitability on the application side;
As a result, over the past three quarters, the value allocated to token holders by protocols (such as through buybacks and token burns) has reached historical highs;
The regulatory environment has also shifted, with recent legislation like the "Genius Act" providing possibilities for institutional participation in DeFi and further legitimizing the "allocation of value to token holders";
Looking ahead: the data for 2025 and the forecast of "on-chain fees exceeding $32 billion in 2026, a year-on-year increase of 63%" confirm that on-chain monetization is continuing to rise. The scaling speed and scale of the application side are unprecedented, with increasing value distribution; at the same time, regulatory clarity supports broader investor participation. As shown by the relationship between application fees and valuation, the on-chain economy has entered a more mature stage, and fundamental fee metrics are worth close attention from investors.
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