The crypto sector’s onchain economy has transitioned into a new era, fueled by fees, users, and actual demand rather than mere price speculation, as highlighted in a comprehensive new study from the venture capital firm 1kx.
The firm’s Onchain Revenue Report (H1 2025) compiled verified onchain data across over 1,200 protocols, analyzing how value travels through decentralized systems. The outcome: a $20 billion economy that is expanding rapidly.
“Onchain fees are the most evident indicator of genuine demand,” 1kx stated in its report.
DeFi protocols account for approximately 63% of total onchain fees, according to the report, yet newer sectors are ascending swiftly. Wallets experienced a 260% year-over-year revenue increase as interfaces turned into profit centers, while consumer-facing applications surged by 200% and DePIN (decentralized physical infrastructure networks) soared by 400%.
Ethereum’s dominance has decreased as scaling solutions and alternative blockchains have lowered transaction costs — ETH’s average transaction fees have dropped 86% since 2021 — despite the number of monetizing protocols increasing eightfold.
The report also underscores the divergence between fees and valuations. While the top 20 protocols collect 70% of all onchain fees, market capitalizations haven’t kept up. DeFi applications are valued at about 17x price-to-fees, while blockchains are valued at 3,900x, indicating the considerable premium investors place on “nation-state” narrative assets.
This disconnect, 1kx proposes, could signal opportunity. “Markets are starting to value applications like businesses,” the firm noted, suggesting that protocols generating recurring fee revenue could be the foundation for the upcoming investment cycle.
Looking forward, 1kx predicts $32 billion in onchain fees by 2026, marking a 63% year-over-year increase. The primary growth drivers, they note, will be real-world asset tokenization (RWAs), DePIN networks, wallet monetization, and consumer-targeted crypto applications.
With better regulatory clarity and scalable infrastructure on the horizon, the firm contends this could signify the onset of crypto’s “mature phase” — one where usage, fees, and value distribution finally align.
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