Joel John@joeljohn
We have been crunching numbers around revenue and valuations within the industry. Last day, I shipped a long-form observing how and where crypto generates its revenue.
Here are four charts that explain the state of the industry.
1. Crypto is indeed a game of extreme power laws
Since 2020, crypto has generated ±$74.8B in verifiable revenue. This is a mix of t-bills income, trading fees and protocol revenue. The vast majority of it in the past year, came through stablecoins. Circle and tether account for ±98% of all stablecoin revenue. $0.34 of every dollar made (from defillama's data set) goes to a stablecoin firm.
It is fairly apparent that there is latent demand for on-chain dollars and that is why we see an entire economy of VCs and founders flocking to the payments and fintech angle for blockchains. I am not entirely sold on what down-stream monetisation for neobanks look like, esp with Meta coming into the stablecoins game, but there is demand is what is apparent.
The 18 months between Jan of 2024 and June of 2025, saw half of all crypto revenue being generated. We were in an upward trajectory for revenue for a good while before the temporary cooling that has come in the past few quarters.
2. Duopolies are the norm
The lack of latent competition in multiple sectors have made an industry of duopolies. Across the top 15 sectors, combining the top two in terms of revenue, would quickly reveal that close to 80% of most revenue generating sectors are taken up by two firms.
We may not see more competition unless there are two factors playing
- more venture enables small, nimble teams to pursue large opportunities (like telegram bots) without tokens
- tokenised ventures bring fresh energy to established sectors and pursue latent leaders (like in perpetual dex)
Most founders presume there is no competition, when entrenched leaders are eating up $0.8 of every dollar produced. The long-tail is a scary place to be at.
3. More firms generate revenue than ever before
There are close to 100 protocols/projects making over $1million in revenue. Many of these are small, nimble teams making trading interfaces or bots. Some of them are protocols that coordinate capital. It now takes shorter spurts of time to hit $1mil in revenue than ever before.
Part of the reason is the underlying stack evolving. Players like Solana, Privy and the network of on-ramps for stables make it considerably easier for founders to build, distribute and develop applications. The surface area for what small, mimble, privately held projects can do through retaining bulk of the revenue is barely explored. I have a hunch sectors like prediction markets will continue to help teams turn profitable faster.
Which tbf puts the role of a crypto VC into question. What do you do when teams don't need your capital? I have views, but perhaps best shared later.
4. Decentralised Exchanges are considerably discounted compared to L1/L2
If you study the numbers, it quickly becomes apparent that there are DeFi primitives that do more in economic activity than most L2s but are considerably discounted. I think the market will reprice this entirely. There is a lot more bloodbath in L2-land. There is a lot of repricing to be had in DeFi.
With institutional capital entering the arena, there are good grounds for financial primitives to be valued higher. Most teams do not get an "integrity' premium but I have a hunch that this part of the cycle is where teams that were building since 2021, with treasury managed well begin dominating over random L2s that were grossly overvalued. Two key reasons for that. L2s were overvalued to begin with due to excess dry powder in '23/24 flowing towards them. In the two years since, many of them have sub $100 in daily revenue. Eventually markets will price that more aggressively.
Whole piece linked below if you'd like to follow the money