Onchain Economy Hits $20B as Fees Signal Real Demand

The onchain economy of the crypto industry has entered a new phase, one driven by fees, users and real demand rather than just price speculation, according to a new study by venture firm 1kx.

Onchain Revenue Report of the company (H1 2025) aggregate onchain data verified through over 1,200 protocols, tracking how value actually moves through decentralized systems. The result: a $20 billion economy growing at lightning speed.

“Onchain fees are the clearest signal of real demand,” 1kx wrote in its report.

DeFi protocols still account for around 63% of total onchain fees, according to the report, but new verticals are growing rapidly. Wallets saw a 260% year-over-year increase in revenue as interfaces became profit centers, while consumer applications jumped 200% and DePIN (decentralized physical infrastructure networks) grew 400%.

Ethereum’s dominance has declined as scaling solutions and alternative blockchains have reduced transaction costs – average ETH tx fees are down 86% by 2021 – even as the number of monetization protocols is eightfold.

The report also highlights how fees and valuations diverge. While the top 20 protocols capture 70% of all onchain fees, market capitalizations have not kept pace. DeFi applications trade at around 17x price-to-fee, while blocks are valued at 3,900x, reflecting the persistent premium investors assign to the narrative assets of the “nation-state”.

This discrepancy, 1kx suggests, may represent opportunity. “Markets are starting to price applications like businesses,” the firm noted, implying that protocols with recurring fee income could anchor the next investment cycle.

Looking ahead, 1kx predicts $32 billion in onchain fees by 2026, a 63% year-over-year increase. The biggest growth drivers, he says, will be real asset tokenization (RWAs), DePIN networks, wallet monetization and consumer-facing crypto applications.

Combined with improving regulatory clarity and scalable infrastructure, the firm argues that this could mark the start of crypto’s “mature phase” — one where usage, fees and value distribution finally converge.

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