Blockchain protocols and decentralized finance (DeFi) networks generated nearly $10 billion in on-chain revenue during the first half of 2025, according to a comprehensive report from venture firm 1kx. The analysis, which aggregated data from over 1,200 protocols, projects total on-chain fees will reach $19.8 billion for the full year 2025, marking a 35% year-over-year increase.
DeFi protocols dominated, accounting for 63% of total fees at $6.1 billion, driven by decentralized exchanges, perpetual trading platforms, and lending markets. However, other sectors showed explosive growth: wallet revenue surged by over 260% YoY, consumer applications by 200%, and decentralized physical infrastructure networks (DePIN) by 400%.
Efficiency gains are reshaping the landscape; average blockchain transaction fees fell by 86% since 2021, largely due to Ethereum's scaling efforts like EIP-1550 and Layer 2 adoption. Despite lower fees, the number of monetizing protocols expanded from 125 in 2021 to 969 in H1 2025, with daily transactions rising 2.7 times to 169 million and monthly active wallets increasing 5.3 times to 273 million.
New protocols are capturing market share: Solana-based DEXs like Meteora and Raydium gained traction, while Hyperliquid generated 35% of derivatives fees within a year of launch. Jupiter increased its perpetual trading share from 5% to 45%, and 32 protocols reached $100 million in annual fees within their first year. Additionally, protocols distributed $1.9 billion to token holders in Q3 2025 through buybacks and burns, and incentive emissions dropped from $2.8 billion in H2 2021 to under $0.1 billion in H1 2025.
The report highlights a structural shift from token speculation to usage-based revenue, with real-world asset tokenization fees growing 50 times YoY. Projections for 2026 indicate fees could reach $32 billion, driven by application-layer growth. Bitcoin was excluded from the analysis as it functions primarily as a store of value.
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