8 key takeaways

This report - the first to aggregate onchain fee data across 1,000+ protocols - analyzes sector trends, revenue drivers, fee allocations, and valuation implications. User paid fees remain the clearest signal of protocol value creation, though context is key:

At the 2021 bull-market peak, quarterly fees reached $9.2B, dominated by a few proof-of-work blockchains; Ethereum alone generated ~40% of those, as speculation made users insensitive to high transaction costs.

By 2025, transaction costs have fallen about 90% as networks optimized for efficiency, broadening adoption and allowing applications to monetize sustainably on blockchain rails. Regulatory barriers to investor participation are also easing.

Together, these shifts mark a more mature phase of digital asset monetization - one where growth in protocol value creation and investability increasingly converge: As the light blue line indicates: allocations to token holders are at an all time high, showing that the efficiency gains allow for distribution of income. Hence, this is the time for investors to pay attention to the maturing monetization of protocols.

Onchain Revenue Becomes $20 Billion Economic Powerhouse

How Big are Onchain Fees?

Based on end of Q3 data, 2025 fees are projected at $19.8B - up 35% YoY, but still 18% below 2021 levels

• Onchain fees are up over 10 times in 2025 vs. 2020, a CAGR of about 60%

• Users paid $9.7 B in onchain fees in H1 2025, up 41% YoY and the highest first-half on record. 

• 2021 remains the overall peak, driven by its second half - industry dynamics have since shifted materially, hence we are going to revisit H2 2021 throughout this report

Why do onchain user-paid fees matter?

Establishing Protocol Tokens as an investable asset class

Currently, digital tokens are primarily misunderstood as speculative assets for retail investors. This report argues they can evolve into an investable asset class for a broader, more sophisticated set of market participants, provided networks achieve product–market fit and sustainable business models. 

We view fees paid as the best indicator, reflecting repeatable utility that users and firms are willing to pay for. As protocols mature and regulation improves, the ability to generate and distribute consistent fee revenue will separate durable networks from early-stage experiments.

Today, over 80% of onchain fees are generated from tokenized protocols, offering global, permissionless investment access. Exposure to offchain income is largely limited to mature listed firms or private vehicles.

Growing relevance of Onchain Activity and Efficiency

Onchain fees, though still a minority of industry income, offer clear signals of adoption and long-term value creation: 2025 YtD has close to 400 protocols with $1M+ ARR, and 20 passing over $ 10M in value to their token holders.

This is enabled by blockchain’s global reach and rising efficiency, which allow applications to scale rapidly and profitably (all shown in later sections of this report).

This has driven market share gains from off-chain competitors, e.g. DEXs now facilitate 25% of total crypto trading volume, while many high-growth business models, such as DePIN, require onchain infrastructure.

Advantage of Onchain Fee Transparency

Transparency is a core principle of blockchains - “don’t trust, verify”. Unlike traditional finance with delayed disclosures, onchain financials provide real-time, verifiable data.

For protocols issuing tokens to attract global investors, this visibility is critical: investors expect verifiable business metrics. An increasing number of protocols now disclose income or use onchain mechanisms to reflect performance, even where part of revenues remain off-chain.

Digital asset revenues extend beyond onchain fees¹⁾, though these grow the fastest enabled by maturing Blockchain technology:

• Onchain fees $ 9.7B: 41% YoY growth has two diverging parts: 

  • Blockchains moved past their high-cost, low-volume phase and are becoming commoditized infrastructure, with fees steadily declining through efficiency gains²⁾

  • Applications benefit from this shift, scaling rapidly on cheaper, more efficient rails, growing 126% YoY

• Offchain fees $ 23.5B: 

  • CEX revenues with the largest share, estimated $ 19B

  • The remainder is largely other finance infrastructure (market makers, funds AUM fees) and crypto casinos³⁾

• Other income $ 23.1B splits mainly in two parts:

  • Block rewards for miners and stakers operating the Blockchains. They earn the most with Bitcoin ($ 8B), Solana ($ 2B) and Ethereum ($ 1B)

  • Stablecoin issuance: Circle and Tether generated $ 4.5B in yield on assets backing their emitted stablecoins (e.g. T-Bills)

DeFi Dominates Onchain Earnings in 2025

Where are Onchain Fees Generated?

$ 9.7B was paid to protocols in H1 2025, dominated by DeFi:

• 63% DeFi/Finance: led by trading fees from DEXs and Perps and derivatives platforms

• 22% Blockchains: mainly L1 transaction fees and MEV capture; L2/L3 fees remain marginal.

• 8% Wallets: meaningful fees since Q4 ’24 from swap activity, driven by Phantom (30% of all Wallet fees).

• 6% Consumer: >80% launchpads (Pump.fun ~60% of sector), 8% casinos, 4% Creator economy and social.

• 1% DePINs: small, but fastest growing sector (>400% YoY)

• 1% Middleware: 55% Bridges (lead by Li.fi), 15% identity and reputation, 15% Developer tooling

Blockchains projected to have <20% share in fees 2025:

• 2021 users paid $ 13.4B for Blockchain transactions, 56% of total

• When overall onchain fees resurged in 2024, Blockchains lost that lead position to DeFi/Finance Applications, which is on track for $ 13.1B / 66% of total in 2025

• DeFi/Finance continuing strong growth, 113% YoY in H1 ‘25, setting an all-time high in onchain fees - see drivers next

New all-time high: H1 2025 fees surpassed the H2 2021 peak, driven by new use cases and stablecoin growth.

• Established categories grew fees ~4% 

  • DeFi DEX, perps, and derivatives gained share from CEXs¹⁾

  • Perps 3x’d fees as volumes grew 6x YoY, led by Hyperliquid

  • Lending held steady at ~$ 700M, with new entrants like Morpho improving efficiency

• Stablecoins: Not a new category, but onchain fees hit records as market cap²⁾ reached new highs and monetization on off-chain collateral yields improved

• Other Emerging use cases added $1.1B in fees: 

  • Automation/DeFAI (bots and AI agents), Risk Curation and Vaults, RWAs, and Liquid (Re-)Staking - each generating fees as a share on yields leveraging user deposits

DeFi/Finance fees rose to $ 6.1B (+113% YoY) in H1 2025, reaching $ 4.4B across its core categories: DEXs, Perps and derivatives platforms, and lending. Most gains here are driven by new entrants who previously generating little revenue.

• DEXs: Growth led by Raydium and Meteora, benefiting from Solana’s surge; Uniswap (#3) lagged, and consequently lost share from 44% to 16%.

• Perps/Derivatives: Jupiter grew its fee share from 5% to 45%; Hyperliquid, launched less than a year ago, now contributes 35% of sub-sector fees

• Lending: Aave remains dominant, though Morpho, a lending aggregator built on top of Aave, increased its fee share to 10% coming from basically 0% in H1 2024

Four significant trends for Blockchain fees:

• Efficiency gains: Especially Ethereum reduced transaction costs and hence lowered overall fee income (see section (04) for the breakdown)

• MEV: Flashbots protocol started facilitating the coordination for so-called MEV-transactions on Ethereum. Jito does the same on Solana. The fees paid here relate to Arbitrage opportunities, hence revenues spike during speculative periods, e.g. on Memecoins in H2 ’24/Q1 ’25.

• Concentration: The top 5 protocols (Tron, Ethereum, Solana, Jito, Flashbots) captured ~80% of blockchain fees in H1 ’25. While still high, this marks an improvement from 2021, when Ethereum alone made up 86% of Blockchain fees.

• Rollups (L2/L3): Emerged in 2022 as well.They charge far lower fees than L1s. Volumes remain insufficient for meaningful fee share¹⁾

Maturing blockchain technology has led to a reduction in transaction fees, paving the way for explosive growth in applications at 126% YoY

Fees vs. Value - Are we creating real economic value?

H1 2025 user paid fees are -34% vs all time high of H2 2021, but

• Blockchains became efficient, sparking activity:

  • Ethereum alone did >40% of all onchain fees in 2021, YTD ‘25 <3% - their scaling efforts are a major driver of the 86% decrease of average blockchain transaction fees

  • Daily transactions on Blockchain L1s and L2s increased about 2.7 times to 169M 

• More protocols monetize than ever: In 2021, 125 protocols generated fees, almost all by 20 protocols¹⁾. In contrast, in H1 ‘25, 969 protocols generated fees: 8x growth in 4 years

• Value distributed to token holders increased: 

  • Despite lower fees vs. ‘21, protocols distribute 50% more value back to token holders now - an all time high

  • This development is accompanied by a friendlier regulatory environment for digital assets and value distribution, setting in end of 2024

Blockchain efficiency has surged, enabling higher throughput at lower cost:

• Average transaction fees fell 86%, driven largely by Ethereum (accounting for over 90% of the decline), due to Ethereum's new fee mechanism (EIP-1550) and increasing L2 adoption

• Lower costs broadened participation: 

  • Average daily transactions grew 2.7x vs. H2 2021, with L2s gaining share

  • Similarly, the number of wallets transacting monthly rose 5.3 times to 273M in H1 2025

1,124 protocols of our dataset generated fees onchain in 2025¹⁾

• 389 of those started generating fees in 2025²⁾, and already account for 13% of all fees 2025 YtD, and 17% of Q3 fees

• Prominent examples of this cohort are 

  • Meteora (#1 by overall fees H1 25)

  • Axiom

  • Bullx

  • Trojan

• 2025 is the first year with a significant share of new protocols monetizing outside DeFi/Finance: Of those 150 “Others” in ‘25, DePIN and Consumer protocols are the majority 

• 1,205 protocols generated fee income over the full timeline since 2020

Value distributed to token holders - the net of buybacks, burns, and other accruals minus emissions - reached record levels for the past three quarters: 

• $1.9B was distributed in Q3 2025, basically matching the total from H2 2021, when fees peaked

• For many protocols, however, distributions remain zero, as newer networks still emit more incentives than they return to holders - a common pattern e.g. amongst Blockchain L1s

• Applications drive most of the distributed value, driven by incentive reductions: top apps¹⁾ cut token incentives from $2.8B (90% of their fees) in H2 2021 to < $0.1B in H1 2025, boosting net returns to holders

• Profit-based metrics such as value distribution carry caveats, especially regarding which holders benefit (active vs. passive). See slides 51 and following in the downloadable report for details on methodology and metrics used in the industry.

Asset prices are an obvious revenue driver, but more cost-efficient infrastructure is now moving the needle as well

What drives fees?

Asset prices are an input to dollar-denominated fees for most sectors, creating an expected correlation, but there is more:

• Seasonality: Shifts in market risk appetite drive periodic swings in token prices and, in turn, fee levels

• Causation¹⁾: The relationship varies by time and sector. Fee changes lead valuations in DeFi/Finance (stronger since 2022) and in Blockchains (post-2021, only for 1-month lag though)

• Sector dynamics:

  • Blockchain L1s: Once price-driven (2021), now more impacted by transaction costs given increased efficiency

  • Trading platforms (DEX, Perps, etc): Remain driven by asset prices, yet take rates decreased as competition intensifies on both supply and demand sides.

  • Lending: Fees driven by utilization, positively correlated with prices but governed by rate mechanics.

  • DePIN: Fees track the dollar value of delivered services, with limited sensitivity to asset price fluctuations.

Ethereum’s fee dynamics have changed sharply since 2021:

• The $6.3B record in H2 2021 was driven by high ETH prices and speculative demand, with users absorbing extreme fees

• By H1 2025, ETH prices and volumes were similar, but scaling efforts¹⁾ cut average fees ~95%, leading to a large drop in dollar-based fee revenue.

With positive effects for activity and inflation:

• This allowed to reduce validator incentives in tandem - from $9.4B in H2 2021 to $1.2B in H1 2025 (–90%), hence ETH token supply flat since end of 2022

• While Ethereum's own transaction count rose only modestly, Layer 2s now process 18x its volume, totaling ~22.9M daily transactions in H1 2025.

Uniswap, the first major DEX and long-term leader in volume and fee capture, saw fees decline 18% YoY H1 ‘25 in dollar terms, driven by a lower average fee rate:

• Prices of traded assets in average increased¹⁾, driving a positive impact to fees

• Swap fees range from 5–100 bps, but volumes have shifted to lower-fee pools, reducing the average take rate by >30%.

• Trading volume rose 20% YoY to ~$230B in Q2 2025, but this was largely price-driven as crypto asset prices climbed even more , hence the Asset Trading Volume normalized for prices actually slightly declined

• The same compression in fee rates affects other DEXs. PancakeSwap, however, offset it with higher volumes, achieving ~150% YoY fee growth

While the top 20 protocols drive 70% of revenue, innovators can disrupt incumbents with unprecedented velocity

Who is winning? The top fee generating protocols

In line with sector shares, the top protocols are mainly DeFi/Finance, and Blockchains

• Exceptions are Pump (Consumer) and Phantom (Wallets), though some protocols accrue fees across different sectors (e.g. Meteora has also a token launchpad (Consumer))

• Top 20 (2% of all) protocols account for 69%, showing concentration that is typical for metrics in digital asset markets

• Whilst some protocols like Uniswap, Aave and all Blockchain protocols have been live for multiple years, some protocols like Pump, Photon, and Axiom are less than 2 years old²⁾. 

• Rotation is common as shown on the next slide

Fee generation is highly concentrated: 

• In most sectors, the top 5 protocols capture 80%+ of fees (even higher in DePIN and Wallets) - dark blue bars

• DeFi/Finance more fragmented: top 5 at 41%

Yet leadership rotates: 

• Up to 25% of the top 20 by Fees change each quarter

• The Top 5 of ‘25 captured a lot less a year ago (light blue bars), see DePIN example in the chart 

DEX overall fees are increasing with new quarterly all time high in Q4 2024. Most of the recent gain driven by DEXs on Solana, e.g. Meteora and Raydium

• These DEXs didn’t have meaningful fees a year ago - Solana DEXs are both expanding market share and enlarging the overall onchain fee pool

• Other protocols like Pump.fun launch new DEXs as well and reach high fee income quickly 

• Uniswap as established DEX leader in the past, remains their absolute levels, but loses market share as not present on Solana

• Pancakeswap on the other hand grew fews with extended activity on BNB Chain, taking the lead in Q3 2025 in terms of fees

Of 1,000+ protocols analyzed, 71 have exceeded $ 100M in onchain ARR, and 32 reached that within a year of launch, a pace comparable only to top AI breakouts like Cursor²⁾. Examples include

• Blockchains: Base, Filecoin, Linea

• DePIN: Aethir

• DeFi/Finance: Ethena, GMX, Virtuals, Sushiswap

• Wallets/Interfaces: Axiom, Moonshot, Photon

• Consumer: Friend.tech, LooksRare, Pump.fun

Many early surges were incentive-driven, e.g., LooksRare generated $ 500M in fees in its first three months but emitted an equal amount in rewards³⁾.

Notably, 16 of the 71 launched their platform after June 2023, all but Base as application, underscoring both the concentration of fee generation and the accelerating pace of incumbent disruption enabled by maturing infrastructure.

Ethereum is the first publicly investable asset to reach a $500B+ market cap within six years (2021 bull run):

• Alongside Bitcoin, it is unique in being globally accessible from inception.

• Just before that valuation, Ethereum surpassed $1B in annualized fees, having taken only 2.5 years to reach $100M ARR

• Ethereum’s fee income has since declined, but at its peak in Q4 2021 annualized fees approached $15B

• Only energy companies with comparable speed to 500B valuations as BTC and ETH - Meta as fastest Tech company took 13.5 years

Though applications demonstrate greater causality between revenue and valuation than blockchains, the latter still dominates market cap

Is the market missing something? Onchain Fees vs Valuations

Blockchains dominate the valuations of fee generating protocols as they make 91% of the 1.2T market capitalization under consideration (which excludes Bitcoin) 

• Ethereum, XRP, Solana and BSC alone take ~80% of the market cap of Blockchains

• DeFi/Finance 6%:  Hyperliquid’s Perp DEX launched less than a year ago, yet quickly took the lead in valuation and fees

• All other sectors combined have <2% of market cap

• Consequently of these stark contrasts of fee- and market-cap shares, the Price to Fee ratios (Market cap over annualized fees) are above the 1000s for L1s vs. 10-100s for the other sectors (see chart after next one).

• This reflects the valuation premium that market participants put on to L1s (e.g. similar to Bitcoin there is value beyond fee generation)

Divergence of shares of valuations and fees:

• Blockchain valuations continue to aggregate north of 90% of the total market cap of fee generating protocols, despite their share in fees declined from over 60% in 2023 to 12% in Q3 ‘25. 

• Conversely, DeFi/Finance protocols accounting for 73% of all fees, though in aggregate their market cap share remains well below 10%

Price-to-fee (P/F) ratios, defined as fully diluted market cap over annualized fees, remain far higher for blockchains than for applications, reflecting the earlier divergence between valuations and fee generation:

• Blockchains: The median P/F ratio in Q3 2025 is 3,902x (L1s at ~7,300x)

• DeFi/Finance: The median P/F ratio is 17x (DEX at 14x, lending at 8x)

• Sector ranges are broad, e.g., Blockchains span 1k–12k (Interquartile-range Q3 ‘25), but stable within those broad bands over the past three years

• DePINs as one exception: Median came down to 211x from levels around 1,000x one year ago

Not all tokens represent fee-generating protocols and are excluded from fee-to-valuation comparisons. These exclusions account for 66% of the Q3 2025 average market cap:

• 58% Bitcoin: valued as “digital gold.” While the Bitcoin blockchain generates fees, they are immaterial to its value¹⁾ 

• 7% Stablecoins/tokenized assets: primarily stablecoins; yield on reserves is not user-paid and does not accrue to holders of these tokens

• 1% Memecoins²⁾: driven by speculative trading, with no cash-flow.

An additional 4% of market cap is excluded due to lack of fees or data

The resulting $1.2T / 30% of total market cap is the foundation of our analysis contrasting fees and valuations

Note: some fee-generating protocols lack tokens, hence don’t have a valuation. These represented 24% of total H1 ’25 fees, ~60% of that by Meteora, Phantom, Axiom, Photon, and Flashbots.

Tokenization, DePIN, Wallets and Consumer are the high-growth areas to watch

Where is the next wave of growth emerging?

Tokenized Real World Assets (RWAs) are the smallest fee sub-sector in DeFi yet, but 

• RWA asset value onchain more than doubled YoY in line with a CAGR of 235% over the past four years

• Onchain fees even outpaced this growth: Q3 saw 50x YoY, though on small scale ($ 15M).

• These fees are earned as cut on AUM, transaction- or management fees

• This growth in fees is expected to continue given regulatory tailwinds (more asset classes), increasing RWA AUM²⁾, and more offchain value flows “coming onchain”

• Note that some of the largest RWA-protocols like Blackrocks BUIDL are not included in the onchain fee figure³⁾ 

DePIN is a relative young sector besides some of the first-movers like Helium, Akash and Arweave. More significant monetization started in the last year:

• YoY fees did ~5x, with continued growth driven by Aethier and IO.Net

• Aethir offering GPU-compute has a large share here, though these fees are based on buy-backs

• Whilst the growth of Aethir and IO.net slowed in Q3, further sector growth is visible¹⁾ and more revenue expected to come onchain in the coming quarters²⁾

• The World Economic Forum projects the valuation of the DePIN sector to $3.5 T by 2028 (~90x vs. 2025), indicating that the recent fast growth is going to continue

Wallets and trading interfaces/apps own the direct user interaction and monetize onchain mainly via additional fees on swaps

• Phantom added significant amounts here since Q4 24 in line with the activity surge on Solana 

• Coinbase wallet gaining fee share with monthly fee income of $ 5-15M since 12/24

• Metamask lost share since Phantom and Coinbase entered fee generation

• Interfaces like Photon emerged in 2024 providing trader friendly UX

• As markets declined in Q2, so did fee income for wallets falling ~60% QoQ

Launchpads surged in H2 ’24, with Pump.fun leading at about $250M onchain fees in Q1 ’25

• Other platforms (e.g., Launchcoin on Believe, Meteora) began monetizing in Q2 ’25 capturing marketshare

• Launchpads illustrate how quickly fees can scale - though history cautions: the even sharper rise in gaming (Axie, Sandbox), and creator economy (Opensea, LooksRare) fees in 2021/early 2022 was followed by an equally steep decline

With further regulatory tailwinds, 2026 onchain fees are projected to reach 60% YoY growth at $32+ Billion, all of which is attributable to application growth 

Where are Onchain Fees headed?

The base-case forecast projects $32+B in onchain fees for 2026, 63% YoY, continuing the Application driven growth trajectory: 

• Blockchains: Little growth; continuation of efficiency gains largely offsetting higher activity; deviations remain market-driven (e.g., ‘24/25 “Memecoin Mania”) 

• DeFi/Finance: Continued expansion (>50% YoY), though sensitive to asset price movements, yet supported by new sub-sectors.

• Emerging sectors:

  • RWAs: $500M onchain fees (est. 10x YoY) in ‘26 on rising AUM projections

  • DePIN: >$450M, sustaining triple-digit growth

  • Wallets: Growth slightly higher than DeFi (50%)

  • Consumer: ~70% YoY increase, though with error margins on both directions

• Middleware growing 50% as many protocols on the cusp to start or increase monetization (e.g. Wallet Connect)

Application fees mirrored the 2021 spike of Blockchain fees, but the recent growth in onchain fees is entirely application-driven, a trend expected to continue:

• Emerging sectors like RWAs, DePIN, Wallets, and Consumer grew at triple digits in H1 2025 fees (red line) and are projected to expand another ~70% YoY in 2026.

• Consumer and DePIN protocols already saw an uptick in the number of protocols monetizing in 2025 (dark line in the chart). This trend will continue across all Application sectors

• Nearly all value distributed to token holders by protocols originates from applications (light blue line). Regulatory tailwinds are poised to reinforce this trend

Regulatory environment turned 180

Regulators changed approach and signal permissive environment for digital assets

• More clarity for DeFi applications: MiCA, Genius Act

• Evolving frameworks (Clarity Act, SEC moving to rulemaking-first vs. enforcement-first)

• As regulators and elected officials become more familiar with blockchain technology, laws and regulations should become more fit-for-purpose. The new SEC Chair has called crypto and tokenization a top priority.

This environment in the US already shows that mainstream adoption is ready

• Tokenized funds (BlackRock’s BUIDL fund, tokenized via Securitize)

• Tokenized stocks (e.g. Galaxy’s stock $GLXY, tokenized via Superstate)

• Robinhood announced its own L2 for RWAs

• Depository Trust & Clearing Corporation (DTCC) announced it wants to tokenize its clearing activities

• Digital Asset Treasury companies (DATs) have surged in popularity 

Though, tax laws remain a blocker for more onchain flows

Onchain value flows and fee-generation still impacted by missing clarity of US tax treatment. Examples of open questions:

• Is (un)wrapping a token taxable?

• Are there differences in tax treatment between rebasing LSTs (stETH) and accruing LSTs (wstETH)?

• When is revenue recognized on staking rewards, at accrual or claim?

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