DeFi takes 5x blockchain payment, value front-end applications
Revenue in the crypto industry is increasingly flowing into user-oriented applications rather than underlying blockchain networks, according to recent data, indicating a potential shift in the focus of investors and developers.
Decentralized financial (deFi) applications now account for five times the amount of payments generated by blockchain, according to data shared by James Coates, chief crypto analyst at crypto intelligence platform Real Vision.
The trend indicates that the majority of industry payments are handled by DeFi applications such as wallets, decentralized exchanges (DEXs) and other protocols, while the underlying networks attract a smaller share of revenue.
“While I believe blockchain network outcomes will command a premium, more value than currently implied is likely to slide toward the front end — wallets, DeFi applications and protocols,” Cotts wrote in Thursday's X-Post.
The chart shows a significant increase in the share of payments held by DeFi protocols from parity in mid-2024.
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DeFi applications and protocols have become the 17 highest earners in the blockchain industry
Data compiled by DeFillama shows that DeFi protocols now dominate the ranks of the top-grossing crypto products. In the last 30 days, the top 17 payment generating entities were apps or protocols rather than base-layer blockchains.
Solana handled over $20.4 million in payouts in the last 30 days and was the only blockchain in the top 20. However, this pales in comparison to the $563 million generated by statscoin issuer Tether, the leading payment protocol, according to DeFiLlama.
Ethereum was the only other blockchain to rise from 30th place, generating $10.3 million in 27th place.
The dynamic suggests that developers and institutional investors may pay more attention to DeFi applications than the underlying blockchain layer as applications attract a growing share of total revenue.
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The leadership of Solana among chains may be due to its activity, as Solana was the most used network, with more than 68 million active addresses in the last 30 days, up to 14%, according to the crypto information platform Nansen.
Ethereum was in sixth place, with 13 million active monthly addresses, an increase of 53% in the last 30 days.
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