The on-chain economy of the crypto industry has entered a new phase, driven by fees, users, and real demand rather than mere price speculation, according to a comprehensive new study by venture firm 1kx.
The company’s On-Chain Revenue Report (H1 2025) aggregated verified on-chain data across over 1,200 protocols to track how value actually moves through decentralized systems. The result is a $20 billion economy growing at lightning speed.
“On-chain fees are the clearest signal of real demand,” 1kx wrote in the report.
According to the report, DeFi protocols still account for around 63% of total on-chain fees, but newer vertical protocols are rapidly increasing. With the interface becoming a profit center, wallet revenue grew 260% year over year, consumer apps grew 200%, and DePIN (Decentralized Physical Infrastructure Network) grew 400%.
Despite an 8x expansion in the number of monetization protocols, Ethereum’s dominance has weakened as scaling solutions and alternative blockchains have lowered transaction costs (ETH’s average sending fee has decreased by 86% since 2021).
The report also highlights the disconnect between fees and valuations. The top 20 protocols account for 70% of all on-chain fees, but market capitalization has not kept pace. DeFi applications have a price-to-fee ratio of approximately 17x, while blockchain has a value of 3,900x, reflecting the enduring premium that investors place on “nation-state” narrative assets.
1kx suggests that the discrepancy may represent an opportunity. “The market is starting to price applications like businesses,” the company notes, suggesting that protocols with recurring fee income could be here to stay in the next investment cycle.
Looking to the future, 1kx predicts that on-chain fees will reach $32 billion by 2026, an increase of 63% year over year. The biggest growth drivers are real-world asset tokenization (RWA), the DePIN network, wallet monetization, and consumer crypto apps.
Combined with regulatory clarity and scalable infrastructure improvements, the company claims this could be the beginning of a “maturity phase” for cryptocurrencies, a stage in which usage, fees, and distribution of value eventually converge.
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