Depth Analysis: Sustainability of Revenue for Mainstream Public Chains

In today's rapidly evolving blockchain technology landscape, the revenue sustainability of public chains has become a key indicator for assessing their long-term development potential. This article focuses on the three major mainstream public chains in the current market — Ethereum, Solana, and Tron. By analyzing their Gas fee revenue composition, on-chain economic activities, and user income and expenditure situations, it delves into the revenue models of these public chains and their sustainability.

According to the latest data, Ethereum leads by a wide margin with a total of $99.89 million in Gas fees over the past 30 days, followed closely by Solana and Tron with $46.21 million and $38.97 million in Gas fees, respectively. However, this income advantage is not fully reflected in market enthusiasm and user activity. It is worth noting that Solana's discussion popularity has surpassed Ethereum in the past six months, while Tron has gained widespread recognition in the payment sector due to its low transaction fees.

What's even more striking is that the daily active address data presents a completely different pattern compared to Gas fee revenue: TRON ranks first with 2.1 million daily active addresses, followed closely by Solana with 1.1 million, while Ethereum has only 316,000. This phenomenon highlights the complex relationship between Gas fee revenue composition, on-chain economic activity, and the sustainability of user income and expenses, also providing us with a unique perspective for in-depth analysis of the revenue sustainability of these three major public chains.

Ethereum

Gas Fee Income Composition

Ethereum has undergone a series of significant upgrades, including the transition from Proof of Work (PoW) to Proof of Stake (PoS) and the implementation of the EIP-1559 proposal, which has had a profound impact on its gas fee structure. The new gas fee structure is divided into two parts: the base fee that is automatically burned by the system and the tips that are paid directly to validators. The burning mechanism of the base fee is expected to drive ETH into a deflationary state, potentially increasing its value. Meanwhile, the dynamically adjusted base fee helps optimize the allocation of network resources, while tips provide additional incentives for validators to maintain network security.

In the past 30 days, Ethereum has burned approximately $47 million worth of ETH through its base fee mechanism. This not only reflects the activity level of the network but also provides important evidence for analyzing the contribution ratio of various on-chain activities to total Gas consumption.

The distribution of Gas fee consumption on the Ethereum network is as follows:

• Decentralized Finance (DeFi): 60%
• ETH transfer: 12%
• MEV (Maximum Extractable Value): 8%
• NFT (Non-Fungible Token): 8%
• Layer 2 Solution: 6%
• Smart Contract Creation: 2%

This distribution reflects the diversified development of the Ethereum ecosystem, dominated by DeFi, supplemented by multiple areas such as ETH transfers, MEV, and NFTs, showcasing the network's ongoing vitality and wide range of application scenarios.

On-chain economic activities

DeFi

Decentralized Finance (DeFi), as a core component of the Ethereum ecosystem, encompasses a diverse range of segments including decentralized exchanges (DEX), lending platforms, DEX trading bots, stablecoins, derivatives, cryptocurrency wallets, and liquid staking derivatives (LSD).

• Uniswap (DEX): In the last 30 days, revenue reached 54.23 million USD, contributing 8.15 million USD in burned Gas fees, accounting for about 17.3% of the Ethereum ecosystem. The trading pairs with the highest trading volume are mainly composed of ETH and stablecoins, with a very low proportion of speculative Meme token trading.

• 1inch (DEX): A contribution of approximately $1.21 million in Gas fees, accounting for 3% of the total.

The entire DEX track accounts for more than 40% in the DeFi field and over 25% in the Ethereum ecosystem, highlighting the position of DEX as the most active track in Ethereum.

Stablecoin Transfer

Stablecoin transfers rank second only to DEX in the Ethereum ecosystem, with gas fees burned reaching 4.01 million USD in the past month, accounting for approximately 8.5% of the total gas fees burned during the same period. This data not only reflects the strong on-chain capital demand but also highlights the importance of stablecoin transfers in assessing the sustainable development potential of public chains.

Dex Trading Bot

The rise of the Dex Trading Bot track is attributed to the popularity of Meme coins. As an automated trading tool specifically designed for DEX traders, it primarily facilitates users in snatching up Meme coins. In the past 30 days, the two major projects, Banana Gun and Maestro, contributed $1.73 million and $1.51 million in Gas fees, respectively, accounting for a total of 6.9% of the total Gas fees in the Ethereum ecosystem.

Cryptocurrency Wallet

MetaMask, as the most widely used on-chain wallet project currently, has contributed $2.91 million in Gas fees (burning $940,000) in the past 30 days, accounting for approximately 2% of the total Gas fees on the Ethereum chain.

On-chain transfer

In the past month, Ethereum chain transfers have burned $3.83 million in gas fees, estimated to contribute a total gas fee of about $25.5 million, accounting for approximately 12% of the total gas fees in the Ethereum ecosystem.

MEV

The burning fee of MEV on the Ethereum chain is approximately $3.76 million, accounting for 8% of the total burning fees on the chain. This data indicates that participation in Meme coin projects does not dominate the Ethereum ecosystem.

Ethereum Ecosystem Summary

The Ethereum ecosystem demonstrates a diversified development trend but is concentrated in several main areas. The DeFi sector leads significantly with a 60% share of Gas fees, highlighting its core position, while the distribution of internal sub-sectors is reasonable. ETH transfers (12%), MEV (8%), and NFTs (8%) follow closely behind, with these four categories accounting for a total of 88% of Gas consumption. The sub-sector with the highest on-chain Gas fee burn is DEX (26%), followed by on-chain transfers and stablecoins (17%), Dex Trading Bots (7%), and the wallet sector (3%), collectively accounting for 53%.

Although Layer 2 solutions (6%) and smart contract creation (2%) account for a small proportion, reflecting that ecological development may be in a "valley period", the overall distribution of Gas fees still reflects a relatively balanced development across various tracks of Ethereum, without any single track being excessively concentrated, demonstrating the overall health of the ecosystem.

Solana

Transaction Fee Composition

The fees and costs on the Solana chain can be divided into three parts:

• Transaction Fee: The fee for validators to process transactions/instructions.
• Priority Fee: An optional fee to increase the transaction processing order.
• Rent: Maintain the retained balance for on-chain data storage

The Solana chain stipulates that a fixed percentage of the transaction fee (initially 50%) is to be burned, while the remainder belongs to the validators. Solana stakers have earned transaction fee rewards worth $23.1 million in the past 30 days.

The distribution of interaction volume on the Solana chain is as follows:

• DEX (Decentralized Exchange) Activity: 86%
• Launcher (possibly referring to token issuance or other specific functions): 4%
• Other activities: 10%

On-chain economic activities

DEX

Raydium and Orca account for 70% of the DEX interaction volume on the Solana chain.

• Raydium: In the last 30 days, a transaction fee of 52.37 million USD has been generated, mainly from Meme coin trading pairs.

• Orca: In the past 30 days, $12.25 million in trading fees were generated, with over 50% of the revenue coming from Meme coin trading pairs.

In the entire Solana ecosystem, the Gas fees contributed by Meme coin trading are estimated to exceed 55%, around 30 million USD.

MEV

In the past 30 days, the trading volume of transactions with priority fees (MEV) on the Solana chain accounted for 82.45% of the total trading volume, with MEV fees constituting as much as 80% of the transaction fees, amounting to approximately 30 million dollars.

Dex Trading Bot

The top three Dex Trading Bot projects (Photon, Bonkbot, and Trojan) account for over 90% of the trading share on this chain, with a total revenue of about 33.67 million USD in the past 30 days.

Solana Ecosystem Summary

The current ecological prosperity of Solana heavily relies on Meme coin trading, causing an economic burden of about 110 million dollars per month on participants, annualized to 1.3 billion dollars. This model has significant sustainability risks and needs to seek a more balanced and sustainable development path to reduce dependence on a single, high-risk track.

Tron

The Tron chain has a unique design, where on-chain transaction fees are primarily used to compensate for network energy and bandwidth consumption, rather than for node bribery. Users need to burn TRX to pay for transaction resources when bandwidth or energy is insufficient, promoting TRX deflation.

Since October 29, 2021, the circulation of TRX has shown a continuous deflationary trend, mainly due to the widespread application of USDT on the Tron network and its significant increase in trading volume. Data from July 22, 2024, shows that USDT transfers account for 94.51% of activities on the Tron chain, highlighting its absolute dominance in the Tron ecosystem.

The daily transaction volume on the Tron network shows a strong upward trend, particularly since 2024, with growth becoming more pronounced. During the period from July to August 2024, the transaction volume repeatedly broke through 8 million, reaching a peak close to 9 million.

In August 2024, with the large-scale onboarding of Meme projects, the energy consumption structure on the Tron chain underwent significant changes: the proportion of USDT transfers dropped to 52%, while DEX activities surged from the previous 3% to 47%. However, the actual energy consumption of USDT transfers remained stable, maintained in the range of 80B-90B, highlighting its importance as a rigid demand for users and a cornerstone of the Tron ecosystem.

Summary

This analysis delves into the revenue composition and sustainability of the three major public chains: Ethereum, Solana, and Tron, drawing the following key conclusions:

Ethereum: Showcasing the most balanced and sustainable development model

• Diversified sources of income: Balanced development in multiple areas such as DeFi, ETH transfers, MEV, and NFTs.
• Ecosystem Health: The proportion of core applications is reasonable, reflecting real and sustained user demand.
• Innovation and Upgrade: Upgrades such as EIP-1559 optimize the fee mechanism, creating long-term value through the destruction of ETH.
• Long-term potential: Diverse application scenarios and continuous technological innovation provide strong long-term development momentum.

Solana: Rapid growth but facing sustainability challenges

• Income is highly concentrated: DEX activities account for 86%, with Meme coin trading contributing over 55% of the Gas fees.
• MEV is widely used: 82.45% of transactions use MEV, reflecting a highly speculative environment.
• High user costs: Meme coin players are estimated to lose $110 million per month, totaling $1.3 billion annually.
• Sustainability Risk: The model of over-reliance on Meme coin trading is difficult to sustain in the long term and requires strategic adjustments.

Tron: Focused on the payment sector, showcasing unique advantages.

• Stablecoin Dominance: USDT transfers account for 94.51% of on-chain activity, reflecting its strong position in the payment sector.
• Significant technical advantages: low fees, fast confirmation, and a fixed fee model are suitable for large-scale payment applications.
• Structural resilience: Even during the Meme coin frenzy, the core USDT transfer business remains stable.
• Long-term sustainability: Stablecoin transfers based on rigid demand provide Tron with a reliable long-term revenue source.

In summary, Ethereum stands out with its diversification.