[Simplicity Group] Revenue Generating Apps

Not only are narratives in crypto short-lived and their popularity and usage fluctuate drastically, but it becomes easy to get lost in trends. With new chains, new technologies, new narratives and products, sometimes it can be difficult to zoom out into the bigger picture and see Web3 projects for what they really are: Businesses. Underneath the tokens, complex interfaces, and buzzwords, every protocol ultimately is faced with the challenge of finding ways to sustain itself.

Ethereum Projects:

We see two broad clusters that differently capture value for operations and further development:

1. Those with Protocol-Native Revenue have built-in fees or cash flows that accrue to the protocol/DAO treasury. They have more sustainable, self- contained economics, as usage directly feeds their balance sheets

• Lido takes a 10% cut of staking rewards, directly earning ~$99M in 2024 forthe DAO
• Ondo charges management/redemption fees and skimmed yield on its tokenized funds
• Ethena generates profits from its trading strategy (which it began sharing with ENA holders)
• Axie Infinity collects marketplace fees that boosted its treasury by $4M in 2024
• ImmutableX started monetizing with protocol fees
• OlympusDAO’s model is a bit unique, but one could say bonding discounts and yield on treasury assets are its “revenue” — in effect, it turned external assets into protocol-owned value (growing a $300M treasury backing OHM).

2. Those with External or Token-Based Monetization are projects that did not charge users meaningful fees, instead relying on token incentives, VC funding, or future value capture. They often prioritized network effects over immediate revenue, betting on long-term token value. The downside is a need for continuous funding and the risk that if token demand doesn’t naturally grow, the model can collapse.

• Blur took 0% fees to maximize volume, and rewarded traders with BLUR tokens; essentially Blur “paid” users to grow, burning through token allocations provided by investors, with the plan to maybe enable fees later via fete claar-lalece
• Morpho similarly did not impose a fee but distributed MORPHO tokens to users as an incentive, monetizing only through the token’s governance value.
• Fetch.ai and Golem also fit here — they mostly spent tokens (from ICO or foundation) to stimulate network activity and did not have protocol fees (Fetch’s transactions had almost O fees by design in 2024, and Golem took no cut of transactions).

Solana Projects:

At the time of writing, the Solana generating the most revenue are balanced across different categories, but all correspond to the provision of services within two main categories: DeFi and Infrastructure.

Regarding DeFi protocols’ business models, the main trends observed are:

• Fee-based revenue models: all six projects have models that are tied directly to protocol usage, charging fees on swaps, borrowing/lending, leverage positions, and trading volume.
• Trading-centric: Jupiter, Drift, Raydium, Adrena, and SolTradingBot are all focused on trading, whether via perps, swaps, or snipe bots. Even Kamino is indirectly trading-focused via LP optimization and vaults
• Overall, for these projects, revenue is tied with usage and market prominence, not necessarily with innovation. For example Jupiter leads in revenue but is not necessarily due to complexity but volume, while newer protocols like Kamino and Adrena, have more complex products and in- platform economies, but their revenue is not the biggest out of the bunch.

Within infrastructure projects, the main trends observed are:

• Consistent but Smaller Revenue: revenue is smaller than that of DeFi protocols as it doesn’t necessarily spike with user activity, but rather with network-level activity flows. For example, Marinade and Step earn consistent but modest revenues, but Jito spikes with usage spikes via MEV
• Multiple revenue streams: these projects tend to have more diversified business models. Jito earns from MEV, Step from subscriptions and swaps, Metaplex from minting and secondary markets
• Foundational layer: these protocols can be slower in terms of activity compared to DeFi, but they act as key players for the whole ecosystem, like Metaplex, which has consistently but silently provided services to power a whole narrative within Solana (NFTs)

Ranking top protocols by revenue across ecosystems shows that real traction comes from sustained usage and clear monetization models, not hype.

• For founders, the takeaway is clear: protocols that lean into user pain points by improving the experience with faster execution, deeper liquidity, easier access, and extract value through usage- based models are best positioned for sustainability.
• For users, revenue-generating protocols are usually where the best UX, liquidity, and incentives coincide. If you’re looking to actively participate in an ecosystem, following where fees flow can be a proxy for where real activity and value creation are happening.
• For investors, these metrics help cut through the noise. While narratives shift and TVL can be gamed, consistent protocol revenue signals actual product-market fit. And as new ecosystems emerge, building investment theses on fundamentals like revenue and feestructures offers the best foundation for more sustainable investments.