Authors: Lasse Clausen, Christopher Heymann, Robert Koschig, Clare He, Johannes Säuberlich
Translation: Shan Oppa, Jinse Finance
Eight core points
On-chain revenue has become a $20 billion economic pillar.
Decentralized finance will dominate on-chain revenue in 2025.
As blockchain technology matures and transaction fees decrease, its applications are experiencing explosive growth, with a year-on-year increase of 126%.
Asset prices are an obvious income driver, but more cost-effective infrastructure is now also playing an important role.
Despite the top 20 protocols contributing 70% of revenue, innovators are still able to disrupt existing players at an unprecedented pace.
Although applications outperform blockchain in terms of "revenue-valuation correlation," blockchain still dominates in terms of market capitalization.
Asset tokenization, DePIN, wallets, and consumer applications are high-growth areas worth paying attention to.
If regulations become more favorable, on-chain fees are projected to grow by 60% year-on-year in 2026, exceeding $32 billion, with all growth driven by application-side applications.
This report is the first to compile on-chain fee data for over 1,000 protocols, analyzing industry trends, revenue drivers, fee allocation, and valuation impacts. User payments remain the clearest indicator of a protocol's value creation, but the specific context is also crucial:
At the peak of the 2021 bull market, quarterly on-chain fees reached $9.2 billion, mainly contributed by a few Proof-of-Work (PoW) blockchains; Ethereum alone accounted for about 40% of these fees. At that time, market speculation was rampant, and users were not sensitive to high transaction fees.
By 2025, networks will have improved efficiency through optimization, reducing transaction costs by approximately 90%, driving increased application adoption, and enabling applications to achieve sustainable monetization on the blockchain infrastructure. At the same time, regulatory barriers to investor participation will also be lowered.
These changes collectively signify that digital asset monetization has entered a more mature stage—the growth in protocol value creation and investment viability is increasingly converging. As shown by the light blue curve, the value allocated to token holders is at an all-time high, indicating that increased efficiency has created conditions for income distribution. Therefore, now is a crucial 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 from the end of the third quarter, on-chain fees are projected to reach $19.8 billion in 2025, a year-on-year increase of 35%, but still 18% lower than the level in 2021.
On-chain fees in 2025 are expected to increase more than 10 times compared to 2020, with a compound annual growth rate (CAGR) of approximately 60%.
In the first half of 2025, on-chain fees paid by users reached $9.7 billion, a year-on-year increase of 41%, setting a new record for the same period.
2021 was still the overall peak year (mainly driven by the second half of the year), after which the industry landscape underwent significant changes. Therefore, this report will review the data from the second half of 2021 multiple times.
Why are on-chain fees paid by users so important?
1. Establish the status of protocol tokens as an investable asset class.
Currently, digital tokens are still largely misunderstood as speculative tools for retail investors. This report argues that if networks can achieve product-market fit and establish sustainable business models, tokens have the potential to evolve into an investable asset class accessible to a wider range of more sophisticated market participants.
We consider user payments as the best indicator, as they reflect users' and businesses' willingness to pay for reusable and useful features. As protocols mature and regulations become more sophisticated, the ability to generate and distribute stable fee revenue will become a key criterion distinguishing "networks with long-term viability" from "early-stage experimental projects."
Currently, over 80% of on-chain fees come from tokenization protocols, which provide global, permissionless investment access. In contrast, off-chain revenue streams are largely limited to established publicly traded companies or private investment vehicles.
2. The importance of on-chain activities and efficiency is increasing.
Although on-chain fees still account for a relatively small percentage of total industry revenue, they clearly reflect application adoption and long-term value creation: since the beginning of 2025, nearly 400 protocols have generated over $1 million in annualized revenue, and 20 protocols have distributed over $10 million in value to token holders.
This achievement benefits from the global reach and increasing efficiency of blockchain, enabling applications to quickly achieve scalable profitability (see later chapters of the report for details).
This advantage has enabled on-chain players to seize market share from off-chain competitors. For example, decentralized exchanges now account for 25% of total cryptocurrency trading volume; and many high-growth business models such as DePIN also rely on the support of on-chain infrastructure.
3. Advantage of transparency in on-chain fees
Transparency is a core principle of blockchain – “no trust required, only verification.” Unlike traditional finance, which delays information disclosure, on-chain financial data is real-time and verifiable.
This transparency is crucial for protocols that issue tokens to attract global investors: investors expect verifiable business metrics. Today, more and more protocols disclose revenue or reflect performance through on-chain mechanisms, even if some revenue comes from off-chain sources.
Digital asset revenue is not limited to on-chain fees, but driven by the maturity of blockchain technology, on-chain fees have seen the most rapid growth:
On-chain fees ($9.7 billion): The 41% year-over-year growth includes two opposing trends:
Blockchain has moved beyond the "high cost, low transaction volume" stage and become a standardized infrastructure, with efficiency improvements driving a steady decline in costs².
Applications benefited from this shift, scaling rapidly on lower-cost, more efficient infrastructure, with a year-on-year growth of 126%.
Off-chain fees ($23.5 billion):
Centralized exchanges (CEXs) account for the largest share of revenue, estimated at $19 billion;
The remainder primarily comes from other financial infrastructure (market makers, fund asset management fees, etc.) and cryptocurrency casinos³.
Other income ($23.1 billion): mainly divided into two parts:
Block rewards received by blockchain miners and stakers: Bitcoin contributed $8 billion, Solana contributed $2 billion, and Ethereum contributed $1 billion, accounting for the largest share;
Stablecoin issuance revenue: Circle and Tether earned $4.5 billion from the assets behind their stablecoins, such as U.S. Treasury bonds.
DeFi will dominate on-chain yields in 2025.
From which sectors do on-chain fees originate?
In the first half of 2025, DeFi accounted for the largest share of the $9.7 billion in on-chain fees generated by the protocol.
63%: DeFi / Financial: Primarily transaction fees from DEX, perpetual contracts (Perps), and derivatives platforms;
22%: Blockchain-related: mainly includes Layer 1 (L1) transaction fees and maximum extractable value (MEV) capture; Layer 2 (L2) / Layer 3 (L3) fees still account for a relatively low percentage;
8%: Wallets: Since Q4 2024, swap transactions have driven significant wallet fees, with Phantom contributing 30% of all wallet fees;
6%: Consumer category: Over 80% from launchpad (with Pump.fun accounting for 60% of this category), 8% from casinos, and 4% from creator economy and social applications;
1%: DePIN category: Although small in scale, it has the fastest growth rate (over 400% year-on-year).
1%: Middleware: 55% from cross-chain bridges (led by Li.fi), 15% from identity and reputation services, and 15% from developer tools.
Blockchain-related expenses are projected to account for less than 20% of total expenses by 2025.
In 2021, users paid $13.4 billion in fees for blockchain transactions, accounting for 56% of total fees;
When on-chain fees rebounded overall in 2024, the dominance of blockchain-related fees was replaced by DeFi/financial applications; in 2025, DeFi/financial application fees are expected to reach $13.1 billion, accounting for 66% of total fees.
DeFi/financial applications continued their strong growth, with a year-on-year increase of 113% in the first half of 2025, and on-chain fees reached a record high - see below for specific driving factors.
New historical peak: Expenses in the first half of 2025 will exceed those in the second half of 2021.
New use cases and stablecoin growth drove on-chain fees in the first half of 2025 to surpass the peak of the second half of 2021.
Mature product categories: Costs increased by approximately 4%;
DEXs, perpetual contracts, and derivatives platforms in the DeFi sector are taking market share from CEXs¹;
Perpetual contract platforms, led by Hyperliquid, saw fees increase by 2 times and trading volume increase by 5 times year-on-year.
Lending fees have remained stable at around $700 million, with new players like Morpho gaining market share by improving efficiency.
Stablecoins: Although not a new category, with market capitalization² hitting new highs and the ability to realize the returns of off-chain collateral improving, on-chain fees related to stablecoins have also reached new records.
Other emerging use cases: contributing $1.1 billion in fees, including automated/decentralized artificial intelligence (DeFAI, such as bots and AI agents), risk management and vaults, real-world assets (RWAs), and liquid staking—all of which generate fees by taking a share of the profits from user deposits.
CEXs have low revenue transparency 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 and derivatives platforms, and lending) contributing $4.4 billion. The growth primarily came from new players who previously had meager revenues.
DEX: Growth was led by Raydium and Meteora, both benefiting from the Solana ecosystem boom; while Uniswap, which was once in third place, lagged behind, with its market share dropping from 44% to 16%.
Perpetual contracts/derivatives: Jupiter's fee share rose from 5% to 45%; Hyperliquid, which has been online for less than a year, currently contributes 35% of the fees in this segment;
Lending: Aave remains dominant, but Morpho, a lending aggregator built on Aave, saw its fee share increase from nearly 0% in the first half of 2024 to 10%.
Four Key Trends in Blockchain Fees
Efficiency improvements: Ethereum, in particular, reduced overall fee revenue by lowering transaction costs (see Chapter (04) for a classification explanation);
MEV: The Flashbots protocol has begun coordinating so-called MEV transactions on Ethereum, and Jito has also launched a similar service on Solana. These fees are associated with arbitrage opportunities, and therefore revenue surges during periods of high speculation (such as the meme coin boom of the second half of 2024 to the first quarter of 2025).
Concentration: In the first half of 2025, the top 5 protocols (Tron, Ethereum, Solana, Jito, and Flashbots) accounted for approximately 80% of blockchain-related fees. Although the concentration remains high, it has improved compared to 2021—in 2021, Ethereum alone accounted for 86% of blockchain-related fees.
Rollup (L2/L3): Emerged in 2022, with fees far lower than L1, but current trading volume is still insufficient to support a substantial fee ratio¹.
Header L2 is Base: On-chain fees in the first half of 2025 were approximately $39 million.
As blockchain technology matures and transaction fees decrease, its applications are experiencing explosive growth, with a year-on-year increase of 126%.
Costs and Value: Are we creating real economic value?
In the first half of 2025, user payments were 34% lower than the historical peak in the second half of 2021, but improved blockchain efficiency spurred more activity.
In 2021, Ethereum alone contributed over 40% of on-chain fees; from the beginning of 2025 to the present, its share has dropped to 3%—Ethereum's scaling efforts are the main reason for the 86% decrease in average blockchain transaction fees.
The average daily transaction volume of blockchain L1 and L2 increased by approximately 2.7 times, reaching 169 million transactions;
The number of protocols generating revenue is unprecedented: in 2021, only 125 protocols generated fees, and almost all of those fees came from 20 protocols¹; in contrast, in the first half of 2025, 969 protocols generated fees, an eightfold increase in four years.
Increased value allocated to token holders: Despite lower fees than in 2021, the protocol is currently distributing 50% more value to token holders, reaching an all-time high.
This development is accompanied by a digital asset and value distribution-friendly regulatory environment starting at the end of 2024.
In the second half of 2021, the top 20 agreements accounted for 94% of the total fees; by the first half of 2025, this figure had dropped to 69%.
Blockchain efficiency is greatly improved, achieving both high throughput and low cost.
Average transaction fees decreased by 86%, primarily driven by Ethereum (accounting for over 90% of the total decrease), due to factors including the implementation of Ethereum's new fee mechanism (EIP-1550) and increased L2 adoption.
Cost reduction drives increased participation:
The average daily trading volume increased by 2.7 times compared to the second half of 2021, and the proportion of L2 increased;
Similarly, the average monthly number of transaction wallets increased 5.3 times in the first half of 2025, reaching 273 million.
In 2025, 1124 protocols in our dataset will generate on-chain fees¹:
Of these, 389 agreements generated fees for the first time in 2025², and as of the beginning of 2025 to date, these agreements have contributed 13% of total fees, accounting for 17% of fees in the third quarter;
Typical examples in this batch of agreements include:
Meteora (ranked first in total costs in the first half of 2025)
Axiom
Bullx
Trojan
2025 marked the beginning of a year in which "non-DeFi/financial new protocols" accounted for a considerable share of monetization: among the 150 new "other sectors" protocols added in 2025, DePIN and consumer protocols accounted for the highest proportion.
Data is current as of the third quarter of 2025; in the third quarter of 2025 alone, there were 1,053 agreements that generated fees; 2) Specifically, the fee data for these agreements is available for the first time.
Value allocated to token holders
After deducting buybacks, burns, and other accruals, and further subtracting the "net value" after token issuance, the past three quarters have all reached all-time highs:
The value allocated in the third quarter of 2025 reached $1.9 billion, roughly the same as the total allocation in the second half of 2021 (the peak of expenses);
However, many protocols still have zero allocation – the token incentives for new networks still exceed the value returned to holders, which is common in L1 blockchains.
Applications are the main contributors to value distribution, thanks to reduced incentives: token incentives for leading applications¹ dropped from $2.8 billion in the second half of 2021 (representing 90% of their fees) to less than $100 million in the first half of 2025, significantly increasing net returns to holders.
It should be noted that profit-based metrics such as "value distribution" have limitations, especially regarding the question of "which holders benefit (active holders vs. passive holders)." For details on the industry's methodology and metrics, please refer to page 51 and subsequent sections of the downloadable report.
More efficient infrastructure is becoming a new driving force.
What are the cost drivers?
Asset prices are an input variable for fees denominated in US dollars in most sectors, so there is an expected correlation between the two, but the driving factors are not limited to this:
Seasonality: Changes in market risk appetite can cause cyclical fluctuations in token prices, which in turn affect fee levels;
Causality¹: This relationship varies by time and sector. In the DeFi/finance sector (stronger correlation since 2022) and the blockchain sector (only a one-month lag after 2021), changes in fees lead changes in valuation;
Industry Trends:
Blockchain L1: In 2021, it was mainly driven by price, but now, due to efficiency improvements, transaction costs have a greater impact.
Trading platforms (DEX, perpetual contracts, etc.): still driven by asset prices, but fees have decreased as competition intensifies on both the supply and demand sides;
Borrowing: Costs are driven by capital utilization rates and, although positively correlated with prices, are constrained by interest rate mechanisms;
DePIN: Fees are linked to the dollar value of the services provided and are less sensitive to asset price fluctuations.
Ethereum fee dynamics have changed significantly since 2021.
In the second half of 2021, Ethereum fees reached a record $6.3 billion, driven by high ETH prices and speculative demand, with users at the time having a high tolerance for extremely high fees.
By the first half of 2025, ETH price and trading volume will be similar to 2021 levels, but scaling measures¹ will reduce average fees by about 95%, resulting in a significant drop in fee revenue denominated in USD.
This change had a positive impact on trading activity and inflation:
Validator incentives have shrunk in tandem – from $9.4 billion in the second half of 2021 to $1.2 billion in the first half of 2025 (a 90% decrease), thus keeping the ETH token supply stable since the end of 2022;
Although Ethereum's own trading volume has only increased slightly, L2 trading volume is now 18 times that of Ethereum, with an average daily trading volume of approximately 22.9 million transactions in the first half of 2025.
Such as shifting to Proof-of-Stake, Rollup, Dynamic Fees, Capacity Boosting, and Transaction Packaging
Uniswap, as the first mainstream decentralized exchange, has long held a leading position in terms of trading volume and fee capture. However, in the first half of 2025, its fees, denominated in USD, decreased by 18% year-on-year, mainly due to a reduction in average fees.
The average price of the assets traded during the period increased¹, which should have had a positive impact on expenses;
Swap rates range from 5 to 100 basis points, but trading volume is gradually shifting to lower-rate liquidity pools, resulting in an average rate decrease of over 30%.
In the second quarter of 2025, trading volume increased by 20% year-on-year to approximately $230 billion, but this growth was mainly driven by price (crypto asset prices rose even more), so the actual asset trading volume after price standardization was slightly lower.
Other DEXs also faced similar fee compression issues. However, PancakeSwap offset the impact of fee reductions by increasing trading volume, achieving a year-on-year fee growth of approximately 150%.
Although the top 20 deals contribute 70% of the revenue, the leading players are constantly changing.
Who's leading the pack? Head Fee Generation Protocol
Consistent with industry trends, leading protocols are primarily concentrated in DeFi/finance and blockchain:
Exceptions include consumer-grade Pump and wallet-grade Phantom, but some protocols derive their fees from multiple sources (for example, Meteora also operates a token launchpad, which falls under the consumer category).
The top 20 protocols (accounting for 2% of the total) contributed 69% of the fees, a concentration that is typical in the digital asset market.
Some protocols (such as Uniswap, Aave, and all blockchain protocols) have been operating for many years, while protocols such as Pump, Photon, and Axiom have been operating for less than 2 years.
Cost generation is highly centralized
In most sectors, the top 5 protocols capture over 80% of the fees (with even higher percentages in the DePIN and wallet sectors), represented by the dark blue bars.
The DeFi/financial sector has a low concentration: the top 5 protocols account for 41%;
However, the leading position is not static:
Each quarter, up to 25% of the top 20 most expensive agreements will be replaced.
In 2025, the top 5 protocols will account for a much smaller percentage of fees than they did a year ago (corresponding to light blue bars), with the DePIN field in the chart being a typical example.
DEX fees increased overall, reaching a new quarterly high in the fourth quarter of 2024.
Recent growth has been primarily driven by DEXs within the Solana ecosystem, such as Meteora and Raydium:
A year ago, the fees on these DEXs were negligible; now, Solana ecosystem DEXs are not only expanding their market share, but also driving the growth of the overall on-chain fee pool.
Other protocols such as Pump.fun are also launching new DEXs and quickly generating high fee revenues;
As a former leading DEX player, Uniswap has maintained a stable absolute fee size, but its market share has declined due to its lack of involvement in the Solana ecosystem.
In contrast, PancakeSwap on BNB Chain achieved fee growth by increasing transaction volume, and jumped to the top of the fee revenue list in the third quarter of 2025.
Of the more than 1,000 protocols we analyzed, 71 have achieved over $100 million in on-chain annualized revenue, with 32 of them reaching this goal within a year of launch. Their growth rate is comparable only to leading AI breakthrough projects like Cursor. Typical examples include:
Blockchain-related: Base, Filecoin, Linea
DePIN class: Aethir
DeFi / Financial: Ethena, GMX, Virtuals, Sushiswap
Wallet/API classes: Axiom, Moonshot, Photon
Consumer products: Friend.tech, LooksRare, Pump.fun
Many protocols rely on incentives for early fee growth; for example, LooksRare generated $500 million in fees in its first three months, but also distributed an equal amount of rewards.
It's worth noting that 16 of the 71 protocols were launched on platforms after June 2023, and all but Base are application-level 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 surpass a market capitalization of $500 billion within six years (during the 2021 bull market).
Similar to Bitcoin, Ethereum has been globally accessible from its inception;
Before reaching this valuation, Ethereum's annualized fees had exceeded $1 billion, and it achieved $100 million in ARR in just 2.5 years.
Although Ethereum's fee revenue has since declined, its annualized fee peaked at nearly $15 billion in the fourth quarter of 2021.
Only energy companies can match the speed at which Bitcoin and Ethereum have achieved a $500 billion valuation—Meta, as the fastest-growing technology 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 capitalization.
Is the market overlooking something? The relationship between on-chain fees and valuation.
Among protocols that generate fees, blockchain protocols dominate valuations—accounting for 91% of the $1.2 trillion market capitalization we analyzed (excluding Bitcoin):
Ethereum, XRP, Solana, and BSC alone account for approximately 80% of the market capitalization of blockchain-related companies.
DeFi/Finance accounts for 6%: Hyperliquid, a perpetual contract DEX launched less than a year ago, has quickly taken the lead in terms of valuation and fees;
The combined market capitalization of all other sectors accounts for less than 2%;
Due to the significant difference between the cost ratio and the market capitalization ratio, the "price-fee ratio" (market capitalization divided by annualized fees) varies greatly across different sectors: the ratio for L1 blockchain protocols is as high as several thousand times, while for other sectors it is only 10-100 times (see the next chart for details).
This gap reflects the valuation premium that market participants place on L1 blockchains—similar to Bitcoin, whose value extends beyond fee generation.
The divergence between valuation ratio and expense ratio
Although the proportion of fees for blockchain protocols decreased from over 60% in 2023 to 12% in the third quarter of 2025, their valuation still accounted for over 90% of the total market capitalization of fee-generating protocols; conversely, DeFi/financial protocols contributed 73% of fees, but their market capitalization was still far below 10%.
Price-to-Fee Ratio (P/F)
The price-fee ratio is defined as "fully diluted market capitalization divided by annualized fees." This ratio is significantly higher for blockchain protocols than for applications, reflecting the aforementioned discrepancy between valuation and fee generation.
Blockchain: The median P/F ratio in the third quarter of 2025 was 3902x (approximately 7300x for L1 blockchains).
DeFi / Financial: Median P/F ratio is 17x (14x for DEXs, 8x for lending).
The ratio ranges within each sector are quite wide. For example, the interquartile range for blockchain in the third quarter of 2025 was 1,000-12,000 times, but it has 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 are associated with fee-generating protocols, therefore these tokens are excluded from the "fee-valuation comparison." In Q3 2025, these tokens accounted for 66% of the market capitalization.
58% is Bitcoin: positioned as "digital gold." Although the Bitcoin blockchain incurs fees, their impact on valuation is negligible¹;
7% are stablecoins/tokenized assets: mainly stablecoins; the returns generated by the reserve assets are not fees paid by users, nor do they belong to the holders of these tokens;
1% is Meme Coin²: driven by speculative trading, with no cash flow support;
Another 4% of the market capitalization was excluded due to "no fee data" or "no fees incurred";
Ultimately, we selected a market capitalization of $1.2 trillion (30% of the total market capitalization) as the basis for our "cost-valuation comparison" analysis.
Note: Some protocols that generate fees do not issue tokens, therefore valuation data is unavailable. In the first half of 2025, these protocols contributed 24% of total fees, with Meteora, Phantom, Axiom, Photon, and Flashbots accounting for approximately 60%.
As Bitcoin mining rewards decline exponentially, miners' fee revenue (used to secure the Bitcoin network) may gradually impact its valuation; Meme coins such as Dogecoin, which are "blockchain-native tokens," are still included in the analysis because their protocols generate transaction fees.
Tokenization, DePIN, wallets, and consumer products are high-growth areas.
Which sectors will be the next wave of growth?
1. Real-world asset tokenization (RWAs)
RWAs are the segment with the smallest fee size in the DeFi space, but have significant growth potential:
The value of on-chain RWA assets has doubled year-on-year, with a compound annual growth rate (CAGR) of 235% over the past four years;
On-chain fee growth even outpaced asset value growth: fees increased 50 times year-over-year in the third quarter of 2025, despite a low base (only $15 million).
These fees primarily come from assets under management (AUM) revenue sharing, transaction fees, or management fees;
Benefiting from favorable regulations (more asset classes are open for tokenization), the growth of RWA AUM², and the on-chaining of more off-chain value, fees are expected to continue to increase;
Note: Some large RWA protocols, such as the BlackRock BUIDL Fund, are not included in the on-chain fee statistics.
2. Decentralized Physical Infrastructure Network (DePIN)
Aside from early-stage projects like Helium, Akash, and Arweave, DePIN remains a relatively new field. Over the past year, monetization in this area has increased significantly.
Costs increased approximately fourfold year-over-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 based on token buybacks.
Despite a slowdown in growth for Aethir and IO.Net in Q3 2025, the overall growth trend in the field remains clear¹, and more revenue is expected to be on-chain in the coming quarters;
The World Economic Forum predicts that the DePIN sector will be valued at $3.5 trillion by 2028 (about 90 times more than in 2025), indicating that the recent rapid growth is likely to continue.
3. Wallet and Transaction Interface/Applications
Wallets and transaction interfaces/applications directly connect to users, primarily enabling on-chain monetization through additional fees from Swap transactions.
Since the fourth quarter of 2024, Phantom's expense contribution has increased significantly as the Solana ecosystem has become more active.
Since December 2024, Coinbase Wallet's monthly fee revenue has remained stable at $5 million to $15 million, and its market share has gradually increased.
Metamask's market share has declined as Phantom and Coinbase wallets have entered the fee generation arena;
In 2024, interfaces such as Photon emerged that focused on trader-friendly user experience (UX).
The market downturn in the second quarter of 2025 led to a decrease in wallet-related fees of approximately 60% (quarter-on-quarter).
4. Consumer-grade: Launchpad
In the second half of 2024, Launchpad fees surged, with Pump.fun alone generating approximately $250 million in on-chain fees in the first quarter of 2025.
In the second quarter of 2025, other platforms such as Meteora (based on the Believe ecosystem) also began to monetize and seize market share;
The Launchpad space is showing potential for rapid scaling of fees, but historical experience should serve as a warning: in early 2021-2022, fees for game-related (Axie, Sandbox) and creator economy (Opensea, LooksRare) agreements also saw a sharp increase, followed by a significant decline.
In 2026, on-chain fees will achieve a 60% year-on-year growth, all of which is attributed to the future trend of application layer on-chain fees.
Baseline scenario forecasts indicate that on-chain fees will reach over $32 billion in 2026, representing a year-on-year increase of 63%, continuing the trend of "application-driven growth."
Blockchain: Limited growth potential; the impact of efficiency improvements will largely offset the increase in activity. If deviations occur, they will mostly be driven by market factors (such as the "Meme coin craze" in 2024-2025).
DeFi / Financial: Continued expansion (over 50% year-on-year growth), supported by emerging sub-sectors despite asset price volatility;
Emerging fields:
RWAs: On-chain fees are projected to reach $500 million in 2026 (a 10-fold increase year-over-year), primarily driven by expected AUM growth.
DePIN: Expected to exceed $450 million, maintaining triple-digit growth;
Wallet category: Growth rate slightly higher than DeFi (50%);
Consumer goods: Year-on-year growth of approximately 70%, but the two-way error range is relatively large;
Middleware: Growth of 50%, due to many protocols about to launch monetization or increase monetization scale (such as Wallet Connect).
Application-side fees surged in 2021 along with other blockchain-related fees, but recent on-chain fee growth has been entirely application-driven, and this trend is expected to continue.
In the first half of 2025, expenses in emerging sectors such as RWA, DePIN, wallets, and consumer products increased by triple digits (red line), and the year-on-year growth rate is expected to reach around 70% in 2026.
By 2025, the number of consumer and DePIN protocols that have achieved monetization has begun to increase (darker line in the chart), and this trend will continue across all application areas;
The value distributed to token holders by the protocol comes almost entirely from the application side (light blue line), and favorable regulations will further strengthen this trend.
A 180-degree shift in the regulatory environment
Regulators adjust their strategies, sending a digital asset-friendly signal:
The regulatory clarity for DeFi applications has improved: policies such as the Crypto Asset Markets Regulation (MiCA) and the Genius Act have been introduced.
The framework continues to improve: With the Clarity Act in effect, the U.S. Securities and Exchange Commission (SEC) has shifted to a "rulemaking priority" approach, replacing the previous "enforcement priority" approach.
As regulators and elected officials gain a deeper understanding of blockchain technology, relevant laws and regulations will become more aligned with the actual needs of the industry. The new chairman of the U.S. SEC has already made cryptocurrency and tokenization a top priority.
The current regulatory environment in the United States shows signs of mainstream adoption:
Tokenization Fund: BlackRock's BUIDL Fund (to achieve tokenization through Securitize);
Tokenized stock: For example, Galaxy's stock (to be tokenized via Superstate).
Robinhood announced it will launch its own L2 service for RWAs;
The Depository Trust and Clearing Corporation of the United States (DTCC) announced plans to tokenize its clearing business.
Digital asset treasury companies (DATs) are experiencing a surge in popularity;
However, tax law remains an obstacle to on-chain fund flows: on-chain value flows and fee generation are still affected by the ambiguity of US tax law, such as the following unresolved issues:
Should token wrapping/unwrapping be subject to taxation?
Are there any differences in the tax treatment of compound interest liquidity staking tokens (LST, such as stETH) and cumulative LST (such as wstETH)?
Should the income from staking rewards be recognized "when it is due" or "when it is received"?
Conclusions and Outlook
In the first half of 2025, on-chain fees paid by users reached $9.7 billion, the second highest level since the second half of 2021. The fee growth in 2021 relied on billions of dollars in user incentives, related speculative activity, and a few high-cost PoW blockchains.
Today, fees are primarily generated by the application – financial use cases dominate, but DePIN, wallets, and consumer applications are expanding rapidly (all achieving year-over-year growth of over 200%).
Despite the increase in throughput, blockchain-related fees have remained stable because improved efficiency has reduced unit costs—a trend that has also extended to DEXs and other mature protocols, creating conditions for applications to quickly scale up and generate profits.
Therefore, the value distributed to token holders by the protocol (such as through buybacks and token burns) has reached record highs over the past three quarters;
The regulatory environment has also changed. Recent legislation such as the Genius Act has made it possible for institutions to participate in DeFi and is expected to further recognize the legitimacy of "distributing value to token holders".
Looking ahead: The 2025 data and the forecast of on-chain fees exceeding $32 billion in 2026, representing a 63% year-over-year increase, confirm that on-chain monetization continues to grow. The speed and scale of application scaling are unprecedented, leading to increasing value distribution; meanwhile, clear regulatory support encourages broader investor participation. As the relationship between application fees and valuations suggests, the on-chain economy has entered a more mature stage, and fundamental fee metrics deserve close attention from investors.
