“Fees that are consistently paid over time by users… are really clear indicators of the value and the real use cases that are actually happening on blockchain.” – 01:42
Remy Blaire engages in a compelling discussion with Lasse Clausen, the Founding Partner at 1kx. The segment focuses on the burgeoning landscape of on-chain revenue and its implications for the future of blockchain technology.
Remy opens the conversation by highlighting a striking projection: on-chain revenue could surge to $32 billion in the coming year, driven by regulatory tailwinds and cost-efficient infrastructure that facilitate mass adoption. Lasse shares insights from a recent study conducted by 1KX, which tracked user-paid fees across more than 1,000 protocols, revealing that on-chain fees reached $9.7 billion in the first half of the current year.
As the discussion unfolds, Lasse explains that historically, a significant portion of on-chain fees has been generated by the blockchains themselves. However, advancements in infrastructure have dramatically reduced costs, enabling applications to monetize effectively. He emphasizes that decentralized finance (DeFi) applications are the standout winners in this space, accounting for over 60% of all fees generated.
Remy probes deeper into the importance of user-paid fees as a metric, noting that digital assets are often misunderstood as speculative investments. Lasse argues that these fees represent fundamental value and real-world use cases of blockchain technology, shifting the conversation from mere speculation to tangible utility.
The conversation then shifts to real-world applications, where Lasse highlights that financial services such as lending, borrowing, and trading are leading the charge in fee generation. He also discusses the rapidly growing sector of decentralized physical infrastructure, where real-world assets like computation power and storage are integrated into blockchain protocols, creating efficient marketplaces.
Remy and Lasse explore the competitive landscape of the blockchain space, noting that while the top 20 protocols account for 70% of the revenue, the environment remains ripe for disruption. Lasse points out the rapid pace at which new protocols can ascend the ranks, showcasing the open and competitive nature of the industry.
For investors and institutions, Lasse emphasizes the importance of recognizing that over 30% of the market cap of crypto assets is fee-generating, indicating sustainable business models beyond mere speculation. He also discusses the significance of analyzing net fees, as some protocols incentivize usage, which can skew top-line revenue figures.