Who's got control of the encryption business
Photo by Prathik Desai
Photo by Chopper, Foresight News
I love the seasonal tradition of encryption, such as the Uptober in October and the Recktober in October. People in the community always move a lot of data around these nodes, and humans would have preferred that kind of fun, wouldn't they
THE TREND ANALYSIS AND REPORTING AROUND THESE NODES IS EVEN MORE INTERESTING: "THIS TIME, ETF FINANCIAL FLOWS ARE DIFFERENT," "THE FINANCE OF THE ENCRYPTION INDUSTRY HAS FINALLY MATURED THIS YEAR" AND "BITCOIN IS RISING THIS YEAR" AND SO ON. LATELY, I'VE BEEN READING2025 DeFi Industry ReportI was attracted to several groups of charts on how encryption protocols create "sightly harvests."。
These charts set out the top-end encryption protocols for the year, confirming a fact that has been discussed by many in the industry over the past year: the encryption industry has finally begun to make the harvest attractive. But what is driving these gains
Behind these graphs is another little-known question that deserves to be explored: where are these fees
Last week, I studied in depth the processing fees and collection data of DefiLlama (note: collection refers to payment of the fees retained by the mobile providers and suppliers), trying to find an answer. In today's analysis, I will add more details to these data and will analyze the way and where the encryption industry is going。
The encryption protocol created more than $16 billion in revenue last year, more than twice the $8 billion in 2024。
The value capture capacity of the encryption industry has increased overall, and over the past 12 months, a number of new tracks have emerged in the area of decentralisation finance, such as go to the Centralized Exchange (DEX), token distribution platforms and the Decentralized Permanent Contract Exchange (perp DEX)。
ButThe centre for generating the highest revenues continues to be concentrated on traditional tracks, most notably stable currency distributors。
Two stable money distributors in the head, Tether and Circle, contributed over 60 percent of the total revenue from encryption. In 2025, their market share fell slightly from about 65 per cent in 2024 to 60 per cent。
But the performance of the LDX in 2025 was not insignificant, and the track was almost insignificant in 2024。The four platforms, Hyperliquid, EdgeX, Lighter and Axiom, together, accounted for 7 to 8 per cent of total industry receipts, exceeding the sum of agreements on mature DeFi tracks, such as lending, pledge, cross-chain bridges and decentralised trading polymers。
So, what's the 2026 wind drive? I found the answer to the three main factors that affected the collection patterns of the encryption industry last year:Interest-rate gains, transaction execution and channel distribution。
A spread transaction means that whoever holds and transfers funds can benefit from the process。
The pattern of stable currency distributors is both structural and fragile. Its structure is reflected in the fact that the size of the collection expands with the supply and circulation of stable currencies, and that each digital dollar issued by the issuer is endorsed by the United States Treasury and generates interest. The vulnerability lies in the fact that this model relies on a macroeconomic variable that the issuer has little control over: the Fed ' s interest rate. Today, the monetary easing cycle is just beginning, and as interest rates continue to decline further this year, the dominant position of stabilizers will diminish。
And then there's the trading executive, and this is where the most successful track in the DeFi field went to the hub of the permanent contract exchange in 2025。
The simplest way to understand how decentrized and sustainable contracts exchanges can rapidly capture significant market shares is to see how they can help users to complete their transactions. These platforms have created low friction trading spaces that allow users to access risk positions as needed. Even when market volatility is smooth, users can hedge, leverage, arbitrate, recombine, or pre-position for future layout。
Unlike the off-the-shelf go-to-centre exchange, the decentrization contract exchange allows users to carry out continuous, high-frequency transactions without the need for effort to move the bottom assets。
Although the logic of transaction execution sounds simple and operates very quickly, the technical support behind it is far more complex than it appears. These platforms must build stable trading interfaces to ensure that high loads do not collapse; build reliable order matching and clearing systems to maintain stability in market disruptions; and provide sufficient liquidity depth to meet the needs of traders. Liquidity is the key to success in the down-to-centre sustainable contract exchange: who can continue to provide sufficient liquidity can attract the most transactions。
In 2025, Hyperliquid, with sufficient liquidity provided by the largest number of marketers on the platform, claimed to have continued contracts to go to the centralized trade track. This has made the platform the most centralized and sustainable contract exchange in the last 12 months, 10 months。
Ironically, it is because of the success of these DeFi forever-contract exchanges that they do not require traders to understand block chains and smart contracts, but rather to adopt familiar traditional models of exchange operations。
Once all these problems have been resolved, the exchange will be able to achieve an automatic increase in revenue collection by charging small fees for high-frequency, high-value transactions by traders. Even when spot prices convulsed across the board, the revenue could be sustained because the platform offered traders a wealth of operational options。
That is precisely what I believe is the only track that has the potential to challenge the dominant position of stable currency distributors, despite the fact that the share of revenues on the down-to-date contract exchange last year was only one digits。
The third factor is channel distribution, which brings an incremental revenue to encryption projects such as the token.fun and LetsBonk platforms. This is not very different from the pattern we see in Web2 companies: Airbnb and Amazon do not have any stocks, but with huge distribution channels, they have long gone beyond the positioning of polymer platforms and have reduced the marginal cost of new supplies。
Similarly, the encrypted currency distribution infrastructure does not possess encryption assets such as Meme coins, various kinds of tokens and microcommunities created through its platform. However, by building a user experience without friction, automating currency processes, providing sufficient liquidity and simplifying transactions, these platforms have made it possible to become the preferred place for people to issue encrypted assets。
In 2026, two questions may determine the trajectory of these pull-on forces: will the share of stable currency distributors in industry fall by 60 per cent as interest rates rise to shock spreads? As the pattern at the level of transaction execution becomes concentrated, can the platform for contract renewal break the market share of 8%
The three main factors of spread earnings, transaction execution and channel distribution reveal the source of revenue from the encryption industry, but this is only half the story. It is also important to know what proportion of the total handling fee will be allocated to currency holders before the net profit from the agreement is retained。
The shift in value achieved through the repurchase of tokens, destruction and fee-splitting means that tokens no longer represent mere documents of governance, but represent economic ownership of agreements。
In 2025, fees paid by users of decentralised financial and other agreements totalled approximately $30.3 billion. Of this amount, the agreement retained approximately $17.6 billion after payment of the liquidity provider and supplier. Approximately US$ 33.66 billion of total receipts were returned to currency holders through pledge incentives, fee-splitting, currency buy-backs and destruction. This means that 58 per cent of the fees are converted into contract payments。
This represents a significant shift from the previous industry cycle. An increasing number of agreements are beginning to attempt to make tokens a claim to operational performance, which provides investors with a real incentive to continue holding and doing more of their own good。
The encryption industry is far from perfect, and most agreements still do not allocate any proceeds to token holders. From a macro perspective, however, the industry has changed considerably, a signal that everything is moving in the right direction。
Over the past year, the share of coin-holders ' earnings in total agreement receipts has continued to rise, surpassing the historical high of 9.09 per cent at the beginning of last year and exceeding 18 per cent at the peak of August 2025。
This change is also reflected in token transactions: if I have no return on the tokens in my possession, my transaction decisions will be influenced only by the narratives of the media; but if I have the tokens in my possession that bring me gains through buy-back or fee-splitting, I will consider them as interest-bearing assets. Although it may not be safe and reliable, this shift will affect the way in which the market prices the tokens, bringing its valuation closer to the basics rather than being influenced by media narratives。
Incentive mechanisms will be an important consideration when investors look back in 2025 and try to predict the flow of revenues from the encryption industry in 2026. The past year has also seen the emergence of project teams that prioritize value shifting。
Hyperliquid has created a unique community ecology, returning about 90 per cent of the revenues through the Hyperliquid Assistance Fund to users。
In the token distribution platform, the concept of "incentives for active users of the platform" has been reinforced, and 18.6 per cent of the original PUMP circulation has been destroyed through daily buy-backs。
In 2026, it is expected that "value shifting" will no longer be a small choice, but a necessary strategy for any agreement that wants the currency to be traded on the basis of fundamentals. Last year ' s changes in the market enabled investors to learn to distinguish the value of the receipt of a treaty from the value of a token holder. Once the token holder realizes that the token in his hand represents the claim of ownership, it becomes irrational to revert to the previous model。
I think, ""2025 DeFi Industry ReportIt does not reveal the entirely new nature of the encryption industry ' s search for revenue patterns, a trend that has long been under discussion in the past few months. The value of this report lies in the fact that the data reveal the truth and that, when we dig into them, we find the secret that the encryption industry is most likely to succeed。
By analysing trends leading to the collection of the agreements, the report makes clear that:Those who control the core channels, spreads, transaction execution and channel distribution make the most profits。
In 2026, I expect more projects to translate the fees into long-term returns for currency holders, especially in the context of the declining attractiveness of spread transactions as a result of the downward cycle of interest rates。
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