Crypto revenues shift from blockchains to DeFi applications

According to recent data, crypto industry revenue is increasingly moving away from blockchains and toward user-facing applications.

This change shows where real value is now being created in the crypto space. According to Jamie Coutts, chief crypto analyst at Real Vision, data shows that decentralized finance (DeFi) applications now bring in five times more fees than blockchain networks.

These applications include wallets, decentralized exchanges (DEXs), and other protocols that users interact with directly. By mid-2024, blockchains and DeFi applications were charging similar fees, but DeFi protocols have since taken a clear lead.

This trend suggests that the platforms closest to users capture more value than the underlying networks. Even though blockchains still provide security and infrastructure, they generate a smaller share of total fees compared to applications built on them.

Coutts believes that blockchain networks will always benefit from strong network effects. However, he argues that more value should be shifted to the beginning of the ecosystem. Wallets, DeFi applications, and protocols manage user activity, transactions, and liquidity, making them natural fee generators.

DeFi Apps Dominate Crypto Fees

Data from DeFiLlama supports this view. Over the past 30 days, the 17 highest fee-generating crypto entities were all applications or protocols, not base layer blockchains. Stablecoin issuer Tether ranked first, generating around $563 million in fees, well ahead of any blockchain.

Among blockchains, Solana performed the best, earning around $20.4 million in fees over the same period. It was the only blockchain to rank in the top 20. Ethereum was the only other blockchain in the top 30, earning $10.3 million and ranking 27th.

According to Nansen, Solana was the most used blockchain, with more than 68 million active addresses in the last 30 days, an increase of 14%. Ethereum ranked sixth, with 13 million active addresses, but showed strong growth of 53%.

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