The brutal liquidation of the public chain market in 2025: thriving casinos, fake ghost towns, and VC's harvest game

Author: BlockWeeks Crypto Weekly

In the cryptocurrency market, if you only look at Market Cap, you see a thriving digital utopia where everything is growing. Valuations in the hundreds of billions of dollars, grand technical whitepapers, Turing Award winners’ halos… everything seems to be on the dawn of the next internet.

But if you change your perspective — a perspective that only considers “On-Chain Real Revenue (Fees)” — you will see a completely different, even chilling picture: In this so-called trillion-dollar market, the vast majority of “unicorns” are actually long dead zombies.

Recently, BlockWeeks conducted a detailed analysis of DeFiLlama’s public chain “Fees” data, and we uncovered an unavoidable structural problem: Cryptocurrency public chains have entered an era of “extreme profit concentration and long tail collective zombification.”

All core data in this article comes from DeFiLlama’s “Fees / Revenue by Chain” panel (snapshot taken: December 16, 2025). The “Fees” defined here refer to the total on-chain user payments (top-line), an approximate indicator of the scale of on-chain economic activity, not protocol net revenue (Protocol Revenue). This article aims to use this standardized, transparent metric to examine each public chain’s on-chain value capture capability.

1. The $17 Shame: The Collapse of the Tech Utopia

Based on our data collection from DeFiLlama, the most alarming figure isn’t from the top-tier giants worth millions, but from the bottom: $17.

This is Algorand — a public chain once hailed as the “Impossible Triangle Solver,” founded by Turing Award winner Silvio Micali, with top-tier technical backing, and at one point, its entire network protocol revenue.

You read that right, not $17,000, but $17.

At this moment, Algorand’s market cap still hovers around the billion-dollar level. A “digital country” with a market cap of $1 billion generates, in a day, less than the cost of four lattes at Starbucks in direct tax revenue from its digital economy. It shows that, despite having the most advanced decentralized technology, once lacking genuine, sustained application demand, its economic value capture approaches zero.

This is not just an Algorand embarrassment; it’s a death knell for the entire “classical public chain” camp.

Look at Cardano (ADA), a giant ranked in the top ten with a market cap and millions of token holders. Yet data shows its recent daily on-chain fees hover around $6,000. This means, aside from asset transfers among holders and network maintenance staking, the chain lacks enough commercial activity to generate significant fees — no large-scale lending, no high-frequency trading, no real paid value exchange.

These public chains are like luxury ghost towns built in the desert. Infrastructure is complete, roads are wide, municipal (foundation) funds are abundant, but no residents (active paying users) are on the streets. Their operation often relies on municipal reserves being sold off (token dumping) to cover operational costs.

2. The Ugly Victory: Who Is Truly Capturing Value?

When shifting focus to the top of the list, a more uncomfortable truth emerges for “tech fundamentalists”: The most profitable are often not the most “elegant” or “decentralized” technically.

Leading the pack is Tron (波场), with an average daily fee of $1.24 million. To many elitists, Tron may not be “technologically elegant,” but the market has spoken: Payments are a necessity. Tron carries the majority of USDT on-chain transfers globally. In this industry full of speculation and bubbles, Tron inadvertently became the only widely adopted payment layer application — albeit as a shadow banking channel for fiat.

It can be said: Payment, the most ancient and fundamental internet need, is currently the only “mass adoption” in the crypto world. Tron’s success is a sharp irony for projects pursuing “perfect technology” but ignoring “real demand.”

Close behind is Solana, with daily fees approaching $600,000. Its logic is straightforward: It is the world’s most active on-chain casino. Meme coins, high-frequency DEX trading, front-running — these activities contribute the majority of fees. Solana’s moat is no longer TPS but “attention flow.” The rise of Base (about $105,000 daily fees) is even more disruptive: it proves that distribution channels (Distribution) are far more important than technology itself. Backed by Coinbase’s massive user base, Base exerts a “dimensionality reduction” attack on other Layer 2s.

This reveals a brutal but clear lesson: the current crypto market’s proven business models capable of generating large-scale on-chain fees are only two and a half — low-cost payments (Tron), high-frequency speculation (Solana/Base), and the asset settlement layer (Ethereum), which is being increasingly eaten away by L2s.

Beyond these, those “enterprise applications,” “supply chain traceability,” “Web3 social,” which once held high hopes, at this cold on-chain fee data stage, have yet to demonstrate scalable paid demand.

3. The VC Trap: Why “Starting at the Peak” Is the Norm

This data also reveals a deeper crisis: The new narrative of L1/L2 driven by massive VC funding is facing a harsh monetization test.

We see new chains like Sui (daily average ~$12,000), Sei (daily average ~$320), Starknet (daily average ~$10,000), which launched with hype and raised hundreds of millions, but their on-chain fee income severely lags behind their multi-billion or even hundred-billion dollar fully diluted valuations (FDV).

The typical script over the past few years has been: VC investment -> teams piling up technical highlights -> attracting airdrop farmers to generate data -> token listings and wealth creation -> retail onboarding narrative -> withdrawal of “airdrop farmers” -> on-chain activity plummets.

This explains why many new chains, despite initial high TPS and tens of thousands of daily active users, quickly become “ghost towns” after a few months. Because those users are mercenaries, not residents. When airdrop expectations are fulfilled and incentives end, genuine organic demand is exposed — daily fees of thousands or tens of thousands of dollars cannot support billion-dollar valuations.

We are facing a serious “block space inflation” problem. The industry has built too many chains, too many L2s, too many data availability (DA) layers, but application-layer innovation is extremely scarce. It’s like the early broadband era, when thousands of fiber optic cables were laid, but Netflix, YouTube, or any killer app consuming that bandwidth had yet to emerge.

4. Investor Awakening: From “Storytelling” to “Auditing the Ledger”

For a long time, crypto market valuation logic was based on “Market-to-Sentiment Ratio”. The grander the narrative, the more imagination, the higher the market cap.

But 2024-2025 is becoming a watershed. As macro liquidity tightens and institutional investors demand more tangible returns, the market is forced to become rational.

For investors, the logic must shift:

1. Beware of “zombie coins”: If a project’s market cap is tens of billions but daily on-chain fees are only a few hundred or thousand dollars, this extreme “deservingness gap” often signals long-term decline. Its only support — community faith — will eventually run out.
2. Focus on “cash flow” capability: Seek ecosystems where users are willing to pay continuously for services even without token incentives. Tron’s stablecoin transfer fees, Base and Solana’s trading fees are direct reflections of genuine demand.
3. Acknowledge “channels and ecosystems are king”: Base’s success proves that pure technical advantage is no longer a moat. Giants with massive user bases (like Coinbase), or native communities capable of cultivating fervent culture, are more valuable assets at this stage. Pure technical public chains that cannot solve “who uses it and why” will ultimately become academic showcases like Algorand.
4. See through VC games: Don’t buy into the false prosperity driven by subsidies and airdrops.

Faced with the brutal reality of daily $17 on-chain revenue, it’s better to hold tight and shift focus to ecosystems that generate real cash flow and have active paying users.

This is not a denial of the long-term value of technological exploration, but a necessary correction of the current distorted valuation system. Only when the market learns to pay for “real value” rather than overextend on “promised stories” can the industry truly enter a healthy dawn.

Important Clarification and Evaluation Framework

The core of this article is based on a unified, transparent metric: “On-Chain Fees” to measure each public chain’s “instantaneous value capture capability.” When reading or citing this article’s conclusions, please understand the following key background and limitations:

1. Overall Context

• Development stage differences: Some chains may be technically advanced but still early, with user bases not yet reaching scale. The data reflects “current state,” not “ultimate potential.”
• Fee model influence: Some chains aim for ultra-low fees (Gas Fee), with native tokens priced low. Even with considerable transaction volume, total fee income in USD appears small. This suggests that evaluation should consider transaction count, active addresses, etc., but the USD-denominated economic throughput upper limit remains a fact.

2. Specific Chain Type Evaluation

To facilitate fair discussion, here are evaluation considerations for certain categories:

We believe that in a world of highly concentrated profits, projects in the long tail that do not find unique application scenarios (like gaming or specific AppChains) are almost doomed. Only platforms that generate cash flow through genuine, sustained user demand have long-term survival and market outperformance potential.