The blockchain industry is undergoing a seismic transformation. By 2025, on-chain fees—which were once seen as speculative noise—have surged to an astonishing $20 billion, marking the formation of an increasingly mature ecosystem where decentralized finance (DeFi) and blockchain protocols are building infrastructures as robust as centralized systems. This shift is not only about transaction volume; it concerns... sustainability. Similar protocols like Aave, Uniswap, and Curve Finance are redefining how value is generated, distributed, and retained, paving the way for the next phase of cryptocurrency.

DeFi's Dominance in On-Chain Economy

DeFi protocols now account for 63% of on-chain fees, according to research, with their efficiency and user-driven monetization even surpassing traditional financial systems.

Yahoo Finance reports

This growth is primarily due to a 126% year-over-year increase in application usage, with the significant rise in application usage attributed to a drastic drop in transaction costs (down 90% from 2021 levels) and scalable infrastructure, as mentioned earlier. How did FinanceFeeds report the results? A $20 billion economic engine, whose protocol generates revenue through actual utility lending, trading, and staking rather than speculative token issuance.

Emerging verticals, such as decentralized physical infrastructure networks (DePIN) and crypto wallets, are exacerbating this trend. For instance, wallet revenue has already grown by 260% year-over-year, while DePIN revenue has surged by 400%, as noted in Yahoo Finance, reflecting a broader shift towards blockchain-driven real-world applications.

Case Study: Leading Protocols

Uniswap: Fee conversion and token burn mechanism

Uniswap's unified proposal is a milestone in the development of DeFi. By reallocating trading fees (0.05%–1%) to

UNI

By incentivizing token holders and implementing a permanent token burn mechanism, the protocol combines incentive mechanisms with long-term value creation. As of the end of 2025, Uniswap v3 alone has accumulated a considerable token value. Cumulative fees reached $2.5 billion, and according to a proposal, 25% to 50% of the distribution plan is for burns, 30% for incentives, and the remainder for holders. Coinotag analysis indicates that if this model is implemented, UNI's market cap could grow by 20% to 30%. Aave: Stock buybacks and institutional integration

Aave's strategy combines deflationary token economics with institutional-grade infrastructure. A $50 million buyback program has already repurchased... 94 million AAVE tokens since May 2025, which will create deflationary pressure, as pointed out in...

Coinotag analysis

Meanwhile, reports indicate that Aave Labs' acquisition of Stable Finance aims to simplify the on-chain savings process for retail users, expanding its consumer-facing business. CoinDesk These initiatives indicate that the company is working to balance token economics with mainstream applications. Curve Finance: Precise fee distribution

Curve Finance's fee model is a model of efficiency. Trading fees and interest from the crvUSD market are aggregated, burned through CoWSwap's conditional orders, and distributed to veCRV holders; please refer to the relevant documentation for details.

Curve documentation

The system operates on Ethereum and the Knowledge Chain to ensure liquidity providers are rewarded while minimizing slippage—this is a key advantage in stablecoin trading.

Market Dynamics and Challenges

The top 20 protocols account for 70% of on-chain revenue, which raises concerns about the centralization of power, as pointed out in...

1kx report

However, the same report notes that thanks to the inherent flexibility of blockchain, new protocols can quickly disrupt the existing landscape. The clarification of regulatory policies—such as the SEC's policy shift after the Gensler case—has also reduced legal uncertainty, enabling protocols to focus on innovation, as noted in Coinotag's analysis.

Institutional investor interest is another positive factor. Platforms like this

Compound

is integrating with... Ronin (a blockchain focused on gaming) to access new liquidity pools. Meanwhile, Coinbase's U.S. Treasury Bootstrap Fund indirectly benefits DeFi by expanding the use of stablecoins.

The Road Ahead: From Speculation to Sustainability

The $20 billion on-chain fee transfer is not just a milestone; it is a validation of DeFi's potential to compete with traditional finance. Protocols prioritizing usage-based revenue, transparent token economics, and institutional partnerships will dominate the next phase. However, investors must remain cautious: a bear market could pressure tokens like Aave, as noted in Coinotag's analysis, which indicates that if the seller dominance continues, Aave could face a 15% decline.

Current data is clear: the financial infrastructure of cryptocurrency is no longer a speculative experiment but a reality worth $20 billion.