DeepWaters team has brought you some Blockworks data, simple words and fancy pictures to report on why crypto is thriving even though your portfolio isn’t.
Early 2025, once again, the crypto crowd is deep in “this is so over” mode.
Sentiment is at rock bottom, doomposting is at an all-time high, Ansem is suddenly the worst evil that ever happened to this industry, and the usual skeptics are out in full force declaring the apocalypse—just like they did last cycle, and the one before that.
Yet, beneath the noise, crypto’s fundamentals have never been stronger. Network activity is climbing, institutional players are finally onboard, apps generate revenue like never before, and the space keeps building at a pace that the outside world barely comprehends.
We’ve been late with our 2024 Review—but in hindsight, that delay feels like a blessing. Instead of getting caught up in the post-election euphoria, we can now zoom out and assess the bigger picture.
DeepWaters team members may or may not hold positions in the projects discussed. Nothing you will read in here should be construed as a financial advice. If you’re sure you can spot one, please reach out to the author and be mean to him.
The Year of Institutional Awakening
2024 was a turning point for crypto—not only for tech breakthroughs, but for its leap into a legit institutional asset class. After years of refining tech and UX, the industry hit the jackpot of institutional awakening.
Traditional finance long eyed crypto with skepticism, paralyzed by a prohibitive regulatory regime. For over five years, banks and funds shunned it—stifled by regulatory fog, enforcement overreach, and career risks—leaving a chasm between Wall Street and digital assets. All that changed in 2024.
Bitcoin ETFs in the U.S. launched on January 11, 2024, and they didn’t just enter the market—they rewrote the script. In just 10 months, AUM soared past $100 billion by November, with BlackRock’s IBIT alone hitting $51 billion, making it the most successful ETF launch in history.
Back in its day, it took gold over five years to reach the $100 billion milestone. By late 2024, Bitcoin ETFs in the U.S. had even surpassed Gold ETFs in AUM—though the flipping was temporary, it was no small feat. What took gold years, Bitcoin achieved in mere months, underscoring its growing dominance as a financial asset.
Regulation kept pace, fuelling the momentum post Trump election:
The SEC dropped ALL major crypto lawsuits, from Coinbase to Justin Sun.
The OCC confirmed US banks can custody crypto, hold stablecoin reserves, and run onchain nodes.
Big banks explicitly committed to launching crypto products.
BlackRock integrated Bitcoin into its model portfolios.
Trump signed the Strategic Bitcoin Reserve order.
Over a dozen states explored holding BTC reserves.
Kraken and Gemini filed for IPOs.
More ETFs were filed: for Solana, Ripple, Litecoin, and more.
2024 became the year the dam broke. A crypto-friendly U.S. administration, combined with ETF mania, triggered a seismic shift. Now, traditional finance scrambles to catch up after years of skepticism.
Stablecoins
Riding the institutional wave, stablecoins emerged as the major crypto use case, seamlessly tying digital assets to global finance.
Stablecoins saw record transaction volumes in 2024, underscoring their growing role in global finance. Over the year, stablecoin transfers totaled approximately $27.6 trillion, a figure that astonishingly surpassed the combined annual volumes of Visa and Mastercard (Visa 15.7T + Mastercard 9.75T = 25.45T).
In Q2 alone, stablecoins handled $8.5 trillion across 1.1 billion transfers, more than doubling Visa’s $3.9 trillion over the same period.
Currently, the stablecoin issuers hold more US treasury than most sovereign economies:
2024 became the breakout year for stablecoins in terms of its penetration beyond DeFi and we expect it’s only going to accelerate further on with upcoming US stablecoin bill.
While often overlooked by the crypto native community, USD-pegged stablecoins remain cryptocurrency's primary use case. Tether, despite starting 2024 under intense skepticism, achieved a record-breaking year. The company's remarkable operational efficiency is evident in its ability to generate over $10 billion in net profits with a team of approximately 100 people—an achievement rarely seen across any industry.
It has now expanding its operations into the mining sector, backing itself with BTC reserves and acquiring other businesses, and boasting 100b reserves. Many wonder if this is the best business in human history.
Price Action Against The Odds
Bitcoin remained the cornerstone of the cryptocurrency market in 2024, but its price behavior shifted noticeably from previous years. Unlike earlier periods, when traditional market dynamics like retail trading and speculation largely dictated its value, this time its price action was primarily fuelled by ETF flows.
Notably, this growth occurred despite, not because of, favourable macro conditions – a testament to the maturation of the industry.
Money flows drive asset prices, and in 2024, global liquidity has been in a choppy state. Central bank policies, shifting investor sentiment, and uneven economic recovery have created a turbulent environment, with funds sloshing unpredictably between markets:
QT has never ended, with Powell keeping FED balance sheet reduction and not willing to pivot:
Historically we have never seen any notable growth in any crypto assets under such macro conditions. This time around?
2024-2025 YoY for then-top-10 crypto assets:
BTC +120%
ETH +46%
BNB +125%
SOL +86%
XRP +238%
ADA +42%
AVAX -7%
DOGE +253%
DOT -19%
TRX +137%
8/10 assets showed growth and outperformed SPX, four of them showed triple digits. Crypto TOTAL +98%; OTHERS +57%.
Tier-1 Assets
The aforementioned price action difference between OTHERS and TOTAL as well as between OTHERS and BTC is perhaps the main source of frustration the crypto people are currently experiencing. It is also a huge contributor to the “cycle is over” sentiment as people grow more and more tired of waiting for their 2021 moment.
For those over exposed to the long tail of altcoins the year has been unfruitful and it never felt like a bull market because their allocations depreciated by 29% in BTC terms.
Of the $1.5 trillion crypto TOTAL added in 2024, over 60% flowed into Bitcoin, leaving altcoins with a modest share of the total growth.
The hierarchy among cryptocurrencies remained robust in 2024, with Bitcoin, Ethereum, and Solana forming a clear tier-1 of blockchains, their decentralisation deemed sufficient and largely beyond dispute. Crypto natives occasionally debate the finer points, but these are details few outside the echo chamber care about.
In contrast, XRP and DOGE—often mocked as lesser players—rode a fleeting market spike after Trump’s victory in late 2024. Misread as a signal of renewed speculative mania, this surge fuelled buying into familiar assets from the prior cycle, though Bitcoin’s dominance faced little real challenge from these outliers.
In our view, what happened in 2024 was a select group of crypto assets began to decouple from the industry’s traditional cyclical patterns in 2024. Their ability to appreciate amid tight liquidity marked a shift, igniting debates over the relevance of cycle theories—whether the crypto market is experiencing a left-translated or right-translated cycle, or if such frameworks are losing utility after all.
We anticipate this trend accelerating over the next five years. As more crypto businesses outgrow cyclical dependencies, pinpointing the market’s place within traditional 4-year-cycle frameworks will grow increasingly elusive. In truth, crypto has never operated in isolation—its trajectory has long mirrored global liquidity and broader economic cycles.
The events of 2024 marked an early milestone in this shift, with assets like Bitcoin beginning to transcend their formative years. This maturation signals a departure from crypto’s insular patterns, tying its future more closely to macroeconomic forces.
High Throughput Is Officially Here
Solana has become the most vibrant ecosystem outside of Ethereum. In the past year:
Solana’s fees grew tenfold in 2024, rising from roughly $3 million weekly in January to approximately $30 million by year-end, with its share of Ethereum’s fee totals increasing from 9% to 76%. Interestingly, this chart also features other notable blockchains. Their imperceptible presence on it is strikingly telling.
Most importantly, this metric doesn’t include out-of-protocol fees that blockchains generate via systems like Jito Tips on Solana and Mevboost Tips on Ethereum.
If you include out-of-protocol tips you will see the bigger picture in the form of Real Economic Value (details here), defined by Blockworks data team as “all transaction fees and out-of-protocol tips (generally related to MEV) paid for transaction execution.”
Essentially, this represents the total amount of money users have paid across the entire stack to interact with blockchains. Note Solana’s standout performance in green:
Solana’s weekly network REV surged tenfold in 2024, climbing from just $4 million at the start of the year to $44 million by year-end, overtaking Ethereum for the first time in crypto history by mid-2024.
Since mid-summer 2024, Solana’s network REV has consistently surpassed Ethereum and all other chains combined, regularly accounting for over 50% of total crypto network revenue. Put simply, at least half of every dollar earned by crypto infrastructure now flows to Solana:
Solana dApps saw their monthly revenue soar 15x, from under $20 million to roughly $300 million. Currently, over 50% of all application revenue in crypto lands on Solana. Combined with the network revenue (REV) stats above, this means at least half of every dollar earned across the crypto ecosystem now comes from Solana.
Once again, other chains are barely noticeable on the chart, underscoring why we highlight BTC, ETH, and SOL as the clear tier-1 crypto cohort emerging in 2024.
Solana TVL and stablecoin supply increased by 6x and 3x respectively, throughout 2024. Unlike other metrics, these are still very far away from Ethereum levels:
Relative to Ethereum, Solana grew from 2.5% to 4.5%
Relative to Ethereum, Solana grew from 4.4% to 10.5%
All this traction resulted in more developers coming on Solana to build products:
In 2024, Solana has arguably set itself apart from the the broader pool of chains striving to eat away Ethereum’s market share. Its distinct builders culture, unwavering focus on product, IBRL ethos, move-fast-and-break-things mentality drove differentiation, prioritising speed, scale, and business.
This edge was amplified by a roster of tightlyalignedventurecapital firms and a TradFi champion akin to BTC’s MicroStrategy, propelling Solana thesis into mainstream finance. A robust pipeline of SOL ETF applications—VanEck, 21Shares, Canary, Bitwise, Grayscale (conversion to ETF), Franklin Templeton and others—further solidified this bridge, with filings acknowledged by the SEC early 2025.
By March 2025, SOL ETFs are widely viewed as inevitable. With spot filings under review and futures ETFs like Volatility Shares’ SOLZ nearing launch, market consensus leans toward approvals, bolstered by a post-Gensler regulatory thaw and Solana’s 2024 momentum:
In 2024, memecoins shed their gimmick status, with Dogecoin surpassing all top-10 assets, WIF minting billionaires in Q1, and a wave of short-lived tokens sustaining crypto’s vitality throughout the year. Solana amplified this surge, outpacing other chains by orders of magnitude, proving "fun" assets could drive performance and boost app development.
Memecoins were a major driver of Solana's revenue success in 2024:
On average, 50-60% of DEX volume was memecoin-related, which naturally led to massive Network REV figures since these transactions were highly competitive, pushing users to pay premiums for guaranteed transaction inclusion. In March 2024, highlighted in red on the chart above, Solana surpassed Ethereum in DEX volume for the first time during the initial memecoin mania and WIF craze, with memecoins alone generating ~$4B of trading volume.
More importantly, that period coincided with the last time Solana experienced disruptive performance issues, with peak transaction reversion rates exceeding 70%:
The memecoin craze served as a valuable stress test, exposing critical flaws in the Agave client implementation that might have otherwise gone unprioritised. This stress revealed weaknesses across the stack, triggering Jito outages and widespread congestion issues.
Despite intense stress on the network, Solana has maintained a steadily improving performance trend, handling increasing demand, currently running smoothly at >1k non-vote TPS—5 times more than the entire Ethereum ecosystem combined.
Solana’s demand digestion has been in a secular uptrend since day one.
For an ecosystem expected to one day power a significant share of global finance, rigorous battle-testing is vital. Solana stands alone as the only decentralized blockchain to be truly battle-tested, a rare feat. Ethereum, though tested, faltered—spawning L2s. Bitcoin’s slowness spares it real trials. The long tail of other chains remains untested, lacking Solana’s magnetic demand. Yet many dismiss this critical edge, quick to label its volume as criminal or fleeting, rather than pausing to consider why such activity gravitated to Solana over others in the first place.
For a deeper understanding of this topic, we strongly recommend reading more here and here.
The memecoin trend persisted throughout 2024, carrying significant business implications. Pump.fun, a platform simplifying memecoin deployment, launched in January 2024 and emerged as crypto’s most successful app to date, hitting a $100 million revenue milestone faster than any predecessor. By streamlining token creation on Solana, it outstripped all prior revenue benchmarks.
The Pump.fun 2024 tally: a staggering $321M in annual revenue. You might think this was an outlier, and that other top-earning apps are more "serious" and "fundamental." Nope:
In 2024, pump.funand tradingbots like Bonkbot, Photon, Bullx, Trojan, and others—all specialized in memecoin trading—have generated half of the crypto industry's top-15 revenue-generating apps.
Even now, in March 2025, with memecoins in ruins—many down 90% from their peaks—the roster of top-generating apps remains exactly the same:
Memecoin-related activity drives significant inflows into liquidity pools across the entire L1 economy, along with elevated priority fees, as traders rush to capitalise on short life cycle dynamics and arbitrage opportunities in thin markets. In this regard, 2024 events underscore a lasting shift: while individual memecoins may and will falter, this vertical endures, generating more revenue than any other use case—with the possible exception of stablecoins.
By late 2024, memecoins were no longer a sideshow—they rewrote crypto’s economic playbook, with echoes lingering into 2025. So much so that it even spawned self-proclaimed gurus over-intellectualising the trend for the easily impressed audience.
Small wonder it all peaked with nothing less than the President of the United States launching his own memecoin, blurring politics and crypto in a jaw-dropping twist, signalling a never-ending party where people win so much they can’t handle it anymore (gah).
The Rise Of Apps
In 2024 it became obvious the crypto ecosystem’s infrastructure performance reached new heights, with high-throughput chains showcasing resilience and scalability under unprecedented demand:
Blockchains got much tougher and faster, hammered by stress tests that actually paid off. This is no longer a hypothetical tech flexing—we have opened the door to apps we couldn’t build before, real business stuff that finally makes sense on chains that do not choke under pressure.
In 2024, “novelty” remained debatable as always, but the money told a clear story: the Fat Protocol thesis seems evidently finished. Revenue shifted sharply to the application layer, a trend building up for years. Whether this holds long-term isn’t certain, but 2024 drove the point home—apps, not protocols, captured the cash flow:
Besides DeFi and aforementioned memecoin-related apps that championed 2024 revenue generation, some noble mentions could include non-financial (or not explicitly financial) apps that finally seem to be taking off:
DRiP held steady as the only non-financial app in Solana’s top-five visited apps, retaining active users all year. It drove over $2.5 million in creator earnings and attracted more than 100k paying customers—nearly the sole crypto instance where daily active users (DAU) carry real meaning as a metric. Crucially, the project has no TGE planned and no explicit airdrop component.
Polymarket gained global recognition during the U.S. elections. Legacy media and casual users across social platforms cited its prediction market data, often unaware it ran as a Polygon dApp.
Polymarket didn’t fade after the U.S. election, either. It seems to have maintained a new retention level around $200 million in open interest, still led by political event wagers and Sports category, too, gaining momentum:
Photo Finish Live, a manager-style game by ThirdTime Entertainment and an exclusive partner of Kentucky Derby, has replicated an entire horse racing economy on Solana—hosting around 500 races daily and distributing around $150k-$300k in prize rewards across the top 10 players per season.
The traditional crypto app use case—DeFi—has not faded away either. Many OGs love to lament that “nothing new has been created since 2021,” that TVL is declining, and that DeFi golden age is over. To all these critics, Ryan Connor offers a good way to measure the current DeFi temperature:
DeFi traction shouldn’t be judged merely by the tally of “new ideas” it generates, but by the rise of largely similar platforms that compete to deliver comparable services and stay profitable—because without profitability, we’re just counting hollow shells. Traditional finance has clung to the same instruments for decades, seldom straying from the tried-and-true. While crypto undeniably enables derivatives that were once impossible, obsessing over these novelties obscures the wider arc of DeFi’s growth as a sector.
As one of the oldest crypto verticals, DeFi’s innovation trajectory is now more likely to produce incremental, marginal gains rather than 0-to-1 leaps. The true measure of its progress lies in how it drives competition across multi-purpose utility, sustained by platforms that thrive profitably.
The core purpose of the DeFi layer is to streamline demandentry while capturing a profit margin. As adoption expands, it’s natural for these margins to shrink across protocols due to rising competition and efficiency. This explains why many DeFi infrastructure projects rank among the top fee-generating apps, yet not all dominate revenue charts:
The closer you are to the customer, the greater the margin you can ultimately capture. As the industry matures, this dynamic suggests that:
app-to-infrastructure revenue ratio will continue to rise in the coming years
DeFi will be won by products that position closer to the end user (the best teams understand it)
DePIN Becomes A Thing
DePIN is a broad topic that can be examined from both a technological and an investment perspective. In this review, we focus on the latter:
In Q1 2025, crypto chancellors on the brink of another neurotic explosion, the Escape Velocity team shared yet another illustration of the DePIN thesis unfolding in real time:
“The DePINs’ onchain revenues GREW by 6-60%, while non-DePINs onchain revenue FELL by 37-92%.”
“No surprise, DePINs have gotten cheaper as they've grown revenue as crypto prices have fallen... Non-DePINs have become more expensive despite prices falling by 40-50%, because revenue have fallen even faster than prices”
DePIN representsa shift in crypto investing by tying assets risk profile directly to orthogonal industries. Each DePIN network is anchored in its own market—whether mapping services, decentralized wireless, RTK networks, or AI chip aggregation—making its value independent of crypto-native developments.
Unlike other crypto assets, which are often entangled in DeFi cycles and token liquidity fluctuations, DePINs derive value from broader economy. This is precisely what the Escape Velocity team illustrates above: crypto infrastructure’s FDV/Fees multiple actually increases during sell-offs—meaning your favorite DeFi projects become more expensive, not less, when the market turns red. DePIN assets behave the opposite way.
This dynamic has given rise to an entirely new sector within crypto, offering investors exposure to markets with lower correlation to the crypto economy. Access to uncorrelated sectors is what enables investors to build balanced portfolios—something crypto investors can now achieve for the first time ever.
In 2024, the DePIN sector has reached a critical inflection point: transitioning from the expansion phase (building supply-side coverage) to attracting paying, recurring customers. A far-from-exhaustive list of DePIN startups worth mentioning:
Geodnet is a location service that provides users with high-precision positioning data from its network of miners, improving location accuracy by a factor of over 200. Think of it as GPS with centimeter-level accuracy.
70x revenue growth since mainnet launch in Q1 2023 (= within 2 years)
Expanded to 13k stations in 4377 cities becoming the largest RTK network on Earthwithin 3 years
80% of project revenue goes to burning GEOD token. Cumulative burn: worth of $200k on Jan 1, 2024 → $1.5m on Jan 1, 2025
Helium is a decentralized wireless network that allows individuals to deploy 5G and IoT hotspots, replacing the need for centralised telecom giants.
25x growth in mobile subscribers since August 2024, with over 400,000 users now transferring more than 20TB of data daily
13x increase in mobile hotspot deployment, reaching over 20,000 active miners
Record-breaking data credit consumption in December 2024
Six carriers participating in the carrier offload program including T-Mobile, AT&T, Telefonica.
Data credit burn results in HNT burn. Recent pace on Mobile DC burn implies ~$3m ARR
Akash is a decentralized cloud computing marketplace that allows users to rent out idle computing power, offering a cheaper alternative to AWS, Azure, and Google Cloud.
Hivemapper is a decentralized alternative to Google Street View, rewarding users for collecting street-level imagery using dashcams as they casually drive around.
Hivemapper has mapped 30% of the world’s roads within 2 years growing 5x faster than Google Street View ever did
Implied ARR is difficult to extrapolate such that it makes sense because the burn occurs in sudden spikes as large clients prolong the service via purchasing more Map Credits which in turn lead to HONEY burn. Currently pacing around $2m.
In 2024, the whole crypto got to watch DePIN founders and investors repeating out loud: “P-M-F.”
Conclusion: We Have Never Been Better and Y’all Should Take a Chill Pill
If you’ve been over exposed to the long tail of assets that naturally took a bloodbath amidst restrictive liquidity regime, don’t let it skew your perspective on the path crypto is carving out as an industry.
2024 was a milestone year. Crypto is no longer just a playground for hype-driven speculation and market timing—it’s a proving ground that enables business, and we’re finally seeing the first results.
The institutions have arrived. The revenue is here. But in this new era, only products with real demand will survive. Narratives alone won’t cut it anymore—PMF and execution is what separates winners from the rest.
The industry is maturing. The next wave of success won’t come from riding speculative hype but from delivering real, tangible value. The projects that thrive will be the ones that can scale, monetize, and carve out their place in the broader economy.