The crypto industry is a whirlwind of constant change, with countless projects emerging and fading. Only a select few achieve true product-market fit and establish sustainable, revenue-generating models. This analysis delves into the protocols that have proven to be the most profitable so far in 2024, examining the core business mechanics driving their success.
8. Base
Launched in Q3 2023 by Coinbase, Base is an Ethereum Layer-2 (L2) scaling solution built on the Optimism Stack. In under a year, it has generated an impressive $52 million in year-to-date (YTD) revenue, securing the eighth spot. This revenue comes from user-paid transaction fees on the rollup.
A key to its profitability is its substantial YTD profit of approximately $35 million. Two major factors contributed to this. First, the implementation of EIP-4844 in March introduced blob fees, drastically reducing Base's data availability costs. These costs plummeted from $9.34 million in Q1 2024 to just $699,000 in Q2—a reduction of about 13 times. Second, Base's high profit relative to other L2s is also because it pays zero token incentives, as it does not have a native token.
7. Lido
Lido's business model is fundamentally tied to Ethereum. It operates as a liquid staking service, allowing users to stake their ETH and receive a liquid staking derivative (stETH) in return. This lets users earn network rewards (staking yields, priority fees, and MEV rewards) while maintaining liquidity.
Lido acts as a two-sided marketplace connecting everyday ETH holders with professional node operators. User-staked ETH is distributed across a diverse set of node operators approved by the Lido DAO. As of now, there are 109 such operators.
This liquid staking giant ranks as the seventh-highest revenue-generating protocol. YTD, Lido has generated $59 million in revenue from its operations on Ethereum L1 and Polygon PoS. Its revenue comes from a 10% fee on user staking rewards, which is then split 50:50 between node operators and the Lido DAO treasury.
After subtracting the 5% of staking rewards paid to node operators and LDO rewards paid to CEX/DEX liquidity pools, the Lido DAO's total profit YTD stands at $22.5 million.
6. Aerodrome
Aerodrome is an Automated Market Maker (AMM) decentralized exchange (DEX) on the Base L2, founded by the creators of Velodrome on Optimism. Since its launch in August 2023, it has rapidly become the largest DEX on Base, with a Total Value Locked (TVL) of $470 million. According to data, Aerodrome has generated $85 million in revenue YTD, while distributing $29.7 million in token rewards over the past 30 days.
The secret to Aerodrome's success lies in its innovative combination of proven mechanisms from the DEX space. Its core model utilizes a veCRV (vote-escrowed CRV)-style tokenomics with its AERO token. Holders can lock AERO for up to four years to obtain voting rights (veAERO). These votes then determine how many new tokens are emitted to liquidity providers (LPs) each week.
A key differentiator from Curve is that 100% of the pool's trading fees go to AERO lockers, compared to a 50:50 split between LPs and CRV lockers on Curve. Furthermore, rewards are proportional to a pool's trading volume performance, incentivizing veAERO voters to direct emissions to the most productive pools.
To simplify its vote-escrowed system, Aerodrome implemented "Relay," a system akin to Votium, where locked AERO tokens are automatically voted on pools, and compounded yields can be swapped back for VELO. Another factor is "Slipstream," a fork of Uniswap V3's concentrated liquidity contracts, helping it compete on high-volume pairs like WETH/USDC.
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5. Ethena
Undoubtedly one of 2024's most successful launches, Ethena is a synthetic dollar protocol. Backed by major investors, its USDe token has skyrocketed to an impressive $3.6 billion market capitalization since its January 2024 launch, making it the fourth-largest stablecoin-like asset today.
How does Ethena work? Similar to Maker's DAI, Ethena's USDe is a USD-pegged stable asset backed primarily by ETH and stETH deposits. The key difference is how yield is generated. USDe's yield comes from a delta-neutral hedging strategy that capitalizes on funding rate differentials between centralized (CEX) and decentralized (DEX) perpetual futures markets.
When funding rates are positive on CEXs, Ethena earns funding fees by holding short positions. Simultaneously, it may pay funding fees on long positions in DEXs where rates are negative. These offsetting positions help maintain the peg regardless of ETH's price direction.
Ethena currently charges no protocol fees. Its primary revenue comes from staking the user-deposited ETH to earn network issuance and MEV rewards. It ranks as the fifth-highest revenue protocol with $93 million in annualized revenue. After accounting for costs paid out in sUSDe yield, Ethena's profit is $41 million, making it one of the most profitable dapps YTD.
It's important to note that Ethena's model is designed to excel in bull markets, which are not perpetual. Its successful points campaign is also unsustainable. To counter this, Ethena is attempting to add utility to its ENA token through locking for points and, more recently, leveraging vaults for restaking yield.
4. Solana
For a blockchain that was nearly declared dead less than a year ago, Solana has made a remarkable comeback. Its revival has been fueled by memecoin trading, its "state compression" update (attracting DePIN projects), a resurgence in NFT activity, and the highly publicized JTO airdrop in December 2023, which triggered massive capital inflows.
Solana currently ranks fourth in revenue generation, with $135 million in YTD annualized revenue. This revenue comes from transaction fees users pay to validators for using the network. However, if we consider token issuance as a cost, Solana does not appear profitable, having distributed $311 million in token rewards in the last 30 days alone.
This touches on the complex issue of L1 business valuation. Proponents might argue that assessing an L1's profit by subtracting "costs" like issuance is misguided. They posit that network issuance isn't a pure cost because L1 token holders can access this value stream by staking on popular liquid staking platforms like Jito on Solana or Lido on Ethereum.
3. Maker
Launched in late 2019, Maker's business model is conceptually simple: it issues the DAI stablecoin against crypto collateral and charges interest on loans. However, its internal workings are quite complex.
Maker has undergone significant evolution. To stimulate DAI demand, it incurs costs through the "DAI Savings Rate" (DSR), a staking yield for locked DAI. To survive bear markets, its core unit focused on purchasing real-world assets (RWAs) like U.S. Treasuries. To scale, Maker has relied heavily on USDC stablecoin deposits since 2022 via its Peg Stability Module, sacrificing some decentralization.
Today, DAI's total supply is 5.2 billion, down 55% from its all-time high of around 10 billion during the 2021 bull market. The protocol has generated $176 million in revenue YTD. A significant portion of recent revenue (14.5%) comes from the controversial DAO decision in April to allow Ethena's USDe as collateral for DAI loans in Morpho vaults. RWA revenue is also substantial, contributing 25.6% of total income.
How much does Maker actually earn? After accounting for costs like the DSR (assuming an 8% rate and a 40% stake rate, costing ~$166 million) and $50 million in fixed operational costs, Maker's annualized profit can be estimated at approximately $73 million.
2. Tron
The Tron network is the second-largest revenue generator in Web3, with approximately $852 million in YTD revenue according to data.
Tron's success is largely derived from the massive volume of stablecoin activity on its network. A significant portion of this stablecoin flow originates from users in developing economies like Argentina, Turkey, and across Africa. Tron consistently ranks alongside Ethereum and Solana for the highest stablecoin transfer volumes.
This primary use case as a stablecoin network is also reflected in its stablecoin supply, which stands between $50-60 billion, second only to Ethereum.
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1. Ethereum
Finally, the highest-revenue business in Web3 today is Ethereum. On a YTD basis, Ethereum's revenue is approximately $1.42 billion.
How profitable is Ethereum? If we subtract the inflationary rewards paid to PoS validators from the transaction fees users pay, the network was profitable in Q1 but showed a loss in Q2. This Q2 loss was likely due to most transaction activity migrating to Ethereum rollups to utilize lower gas costs.
However, as with other L1s, the "revenue minus profit" framework for assessing blockchain profitability can be misleading. It obscures the real value flows to ETH stakers, as users can capture a share of the network issuance by staking on liquid staking platforms.
Frequently Asked Questions
What does "revenue" mean for a crypto protocol?
Protocol revenue typically refers to the fees that are accrued and retained by the protocol's treasury or token holders, rather than paid out to suppliers of capital (like liquidity providers or stakers). It's a measure of the value being captured by the protocol itself.
Why are Layer 1 blockchains like Ethereum considered profitable?
While their net income might sometimes be negative if token issuance is counted as a cost, L1s are considered valuable because they generate massive fee revenue from users. The native token holders can capture this value through staking rewards, making the ecosystem highly profitable for participants.
Is Ethena's USDe a safe stablecoin?
USDe is a synthetic dollar, not a traditional stablecoin. Its stability relies on a delta-hedging strategy in perpetual futures markets. This introduces different risks compared to asset-backed stablecoins, such as exchange counterparty risk and the sustainability of its yield, especially in different market conditions.
What is the main driver of Tron's high revenue?
Tron's revenue is overwhelmingly driven by stablecoin transfers, particularly USDT. It has become the network of choice for many users in developing economies for remittances and payments due to its low transaction fees and high throughput.
How does liquid staking like Lido make money?
Liquid staking protocols charge a commission fee on the staking rewards earned by users. For example, Lido takes a 10% fee on rewards, which is split between node operators and the protocol treasury.
What is the future of protocol profitability?
Profitability is increasingly tied to real-world utility and sustainable tokenomics. Protocols that move beyond pure speculation to offer genuine value—whether in decentralized finance, payments, or infrastructure—are likely to be the long-term winners. The integration of Real-World Assets (RWAs) is also becoming a significant revenue stream.