As the blockchain industry transitions from a speculative boom to sustainable growth, on-chain fees have become a critical barometer of economic maturity. According to a recent report, the blockchain economy is on track to generate $19.8 billion in fees by 2025.
This indicates a shift towards a sustainable, usage-driven economy in the decentralized finance (DeFi) and Web3 ecosystems.
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The State of the Chain Economy in 2025
In a recent report, 1kx.capital revealed that on-chain fees in 2025 are more than 10 times higher than in 2020, representing a compound annual growth rate (CAGR) of around 60%.
Users spent $9.7 billion in the first half of 2025. This is the highest total ever for a first half and an increase of 41% from the previous year. This figure even exceeds that of 2021, where fees reached $9.5 billion over the same period.
“Back then, fee generation was driven by billions of dollars in user incentives, associated speculation, and a few expensive PoW blockchains. Today, fees are generated primarily by apps, led by financial use cases, but growing rapidly in DePINs, wallets, and consumer apps (each with >200% growth YoY),” the report said.
1kx.capital added that average transaction fees fell by 86%, mainly thanks to Ethereum (ETH). The network is responsible for more than 90% of this decline. As transaction costs fell, participation in the ecosystem accelerated.
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Average daily transactions increased 2.7 times compared to the second half of 2021. The number of wallets transacting monthly also jumped to 273 million in the first half of 2025, a 5.3-fold increase. At the same time, the range of fee-generating protocols has expanded, from just 125 in 2021 to 969 in the first half of 2025.
“Based on end-of-Q3 data, 2025 fees are expected to be $19.8 billion, up 35% year-over-year, but still 18% below 2021 levels. Baseline forecasts project over $32 billion in on-chain fees for 2026, up 63% year-over-year, continuing the app-led growth trajectory,” 1kx.capital forecast.
DeFi and Finance Lead On-Chain Activity
DeFi and broader financial applications have continued to dominate the on-chain space, accounting for 63% of all fees in the first half of 2025, or approximately $6.1 billion. This represents a 113% year-over-year increase.
Of this amount, approximately $4.4 billion came from major categories including decentralized exchanges (DEX), perpetual and derivative platforms, and lending protocols.
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“When overall on-chain fees re-emerged in 2024, blockchains lost this leadership position to DeFi/Finance applications, which are on track to reach $13.1 billion / 66% of the total in 2025,” 1kx.capital said.
On Solana, protocols such as Raydium and Meteora led the growth, reducing Uniswap’s market share from 44% to 16%. Jupiter has established itself as a major player in the perpetuals and derivatives segment, increasing its share of industry fees from 5% to 45%. Additionally, newcomer Hyperliquid contributed 35% of all fees in this category.
When it comes to lending, Aave remains the dominant protocol. However, Morpho quickly expanded its footprint, capturing a 10% share of fees.
Beyond DeFi, blockchains themselves accounted for 22% of total fees, primarily driven by layer 1 transaction costs and MEV capture. At the same time, layer 2 and 3 fees have remained relatively marginal.
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Portfolios accounted for 8%. This trend was led by Phantom, which generated approximately 30% of all portfolio fees. Consumer apps contributed 6% of total fees, with launchpads accounting for over 80% of this segment (largely thanks to Pump.fun).
Other contributors included casinos (8%) and creators/social economy (4%). Finally, DePINs (decentralized physical infrastructure networks) and middleware each represented 1% of total fees.
Beyond On-Chain Fees: Growing Digital Asset Revenue
The report highlights that blockchain-related revenue is not limited to on-chain fees alone. A significant portion of revenue also comes from off-chain and network-level sources, which together constitute the broader digital asset economy.
Off-chain fees totaled $23.5 billion, with centralized exchanges (CEX) accounting for the largest share, around $19 billion. 1kx.capital also identified approximately $23.1 billion in additional revenue, primarily from block rewards earned by miners and stakers, and stable coin yields.
