Who controls the revenue lifeline of the crypto industry?
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Who controls the revenue lifeline of the crypto industry?
The profit centers generating the highest revenue remain concentrated in traditional sectors, with stablecoin issuers being the most prominent.
Navigating Web3 tides with focused insightsText: Prathik Desai
Translation: Chopper, Foresight News
I have a soft spot for the seasonal traditions in crypto—Uptober, Recktober. Every year, people in the community dust off reams of data around these themes, and humans do love a good anecdote, don’t we?
But trend analyses and reports around these narratives are even more intriguing: “This time, ETF flows are different,” “Crypto funding is finally maturing this year,” “Bitcoin is poised for a breakout.” Recently, while browsing through the State of DeFi 2025 Report, I was struck by several charts showing how crypto protocols generate “substantial revenue.”
These charts listed the top-earning crypto protocols over the year, confirming a sentiment widely discussed in the industry over the past 12 months: crypto is finally making revenue attractive. But what’s actually driving this revenue growth?
Behind these charts lies another, less obvious question worth exploring: where do these fees ultimately go?
Last week, I dove into DefiLlama’s fee and revenue data (note: revenue refers to fees retained after paying liquidity providers and suppliers) to find answers. In today’s analysis, I’ll add further nuance to these figures, unpacking how money moves within the crypto ecosystem and where it ends up.
Crypto protocols generated over $16 billion in revenue last year—more than double the ~$8 billion in 2024.
The entire crypto industry has significantly improved its value capture. Over the past 12 months, decentralized finance (DeFi) has seen the emergence of entirely new sectors, including decentralized exchanges (DEXs), token launch platforms, and decentralized perpetual futures exchanges (perp DEXs).
Yet, the most profitable revenue centers remain concentrated in traditional categories, with stablecoin issuers standing out the most.
Tether and Circle, the two largest stablecoin issuers, accounted for over 60% of total crypto industry revenue. In 2025, their market share dipped slightly from around 65% in 2024 to 60%.
However, decentralized perpetual exchanges made remarkable strides in 2025—a category nearly insignificant in 2024. Four platforms—Hyperliquid, EdgeX, Lighter, and Axiom—together captured 7% to 8% of total industry revenue, surpassing the combined earnings of established DeFi sectors such as lending, staking, cross-chain bridges, and DEX aggregators.
So what will drive revenue in 2026? I found clues in three key factors that shaped the revenue landscape last year: spread income, trade execution, and distribution channels.
Spread trading means anyone holding or transferring funds can earn yield from the process.
Stablecoin issuers’ revenue model is both structural and fragile. Its structural nature comes from revenue scaling directly with stablecoin supply and circulation—each digital dollar issued is backed by U.S. Treasuries generating interest. The fragility lies in dependence on macroeconomic variables largely outside issuers’ control: namely, the Federal Reserve’s interest rates. Now that a monetary easing cycle has just begun, and with further rate cuts expected this year, the dominance of stablecoin issuers’ revenue will likely weaken.
Next comes the trade execution layer—the birthplace of 2025’s most successful DeFi sector: decentralized perpetual exchanges.
The easiest way to understand why perp DEXs rapidly captured significant market share is to examine how they help users execute trades. These platforms offer low-friction venues where users can enter and exit risk positions on demand. Even during periods of low volatility, users can hedge, leverage up, arbitrage, rebalance, or build early positions for future moves.
Unlike spot DEXs, perp DEXs allow continuous, high-frequency trading without requiring users to move underlying assets.
While the logic of trade execution may seem simple and fast-paced, the technical infrastructure behind it is far more complex than it appears. These platforms must deliver stable trading interfaces that don’t crash under load; build reliable order-matching and liquidation systems that remain functional amid market chaos; and provide deep liquidity to meet traders’ demands. In perp DEXs, liquidity is the ultimate competitive edge: whoever sustains deeper liquidity attracts more trading activity.
In 2025, Hyperliquid dominated the perp DEX space thanks to abundant liquidity provided by the largest number of market makers on any platform. As a result, it ranked as the highest fee-generating perp DEX in 10 out of the past 12 months.
Ironically, the success of these DeFi-based perp exchanges stems precisely from not requiring users to understand blockchains or smart contracts—instead adopting familiar operational models from traditional finance.
Once all these components are solved, exchanges can achieve automated revenue growth by charging small fees on high-frequency, high-volume trades. Revenue continues even when spot prices stagnate, simply because platforms offer rich functionality for active trading.
This is exactly why I believe that despite perp DEXs accounting for only single-digit percentages of industry revenue last year, they represent the only sector capable of challenging stablecoin issuers’ dominance.
The third factor is distribution channels, which bring incremental revenue to crypto projects like token issuance infrastructure—platforms such as pump.fun and LetsBonk. This mirrors patterns seen in Web2: Airbnb and Amazon own no inventory, yet their massive distribution networks have elevated them beyond mere aggregators while reducing marginal costs for new supply.
Similarly, crypto token issuance platforms do not own the meme coins, tokens, or micro-communities created via their services. But by offering frictionless UX, automated listing processes, ample liquidity, and simplified trading, they’ve become the go-to destinations for launching crypto assets.
In 2026, two questions may determine the trajectory of these revenue drivers: Will stablecoin issuers’ share of industry revenue fall below 60% as lower interest rates erode spread income? And as the trade execution landscape consolidates, can perp DEXs break past the 8% market share ceiling?
Spread income, trade execution, and distribution channels reveal where crypto revenue comes from—but this is only half the story. Equally important is understanding how much of total fees are distributed to token holders before protocols retain net revenue.
Value transfer through buybacks, burns, and fee sharing means tokens are no longer just governance instruments—they now represent economic ownership in the protocol.
In 2025, users paid approximately $30.3 billion in total fees across DeFi and other protocols. After compensating liquidity providers and suppliers, protocols retained about $17.6 billion in revenue. Of this, roughly $3.36 billion was returned to token holders via staking rewards, fee sharing, buybacks, and token burns. This implies 58% of total fees were converted into protocol revenue.
Compared to the previous market cycle, this marks a significant shift. An increasing number of protocols are experimenting with making tokens represent claims on operating performance—an incentive that gives investors tangible reasons to hold and support their favorite projects.
Crypto is far from perfect—most protocols still distribute zero returns to token holders. Yet from a macro perspective, the industry has undergone meaningful change, signaling progress in the right direction.
Over the past year, the share of protocol revenue returned to token holders has steadily increased, breaking past the previous high of 9.09% at the start of last year, and peaking above 18% in August 2025.
This shift is also reflected in trading behavior: if my token never delivers returns, my investment decisions rely solely on media narratives. But if my token generates yield through buybacks or fee sharing, I begin treating it as an income-producing asset. While not necessarily safe, this change influences how the market prices tokens—shifting valuations closer to fundamentals rather than hype-driven stories.
As investors reflect on 2025 and look ahead to 2026, incentive design will become a critical consideration. Last year, teams that prioritized value redistribution truly stood out.
Hyperliquid built a unique community ecosystem, returning about 90% of its revenue to users via the Hyperliquid Aid Fund.
Among token launch platforms, pump.fun doubled down on rewarding active users, conducting daily buybacks that have already burned 18.6% of the circulating supply of its native token, PUMP.
In 2026, “value transfer” is expected to transition from a niche approach to a standard strategy for any protocol aiming to have its token trade based on fundamentals. Last year’s market evolution taught investors to distinguish between protocol revenue and token holder value. Once people realize their tokens can represent real ownership, reverting to old models feels irrational.
I believe the State of DeFi 2025 Report doesn’t uncover a fundamentally new phenomenon in crypto’s pursuit of revenue models—this trend has been widely debated over recent months. Its value lies in using data to confirm what many suspected. By digging deeper into this data, we uncover the most likely recipe for revenue success in crypto.
By analyzing dominant revenue trends across protocols, the report makes one thing clear: those who control core channels—spread income, trade execution, and distribution—will earn the lion’s share of profits.
In 2026, I expect more projects to convert fees into long-term returns for token holders—especially as declining interest rates reduce the appeal of spread-based income, making this shift even more pronounced.
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