In the battle over public chain fees, will Solana achieve an astonishing growth of nearly 30 times in 2024?

Author: 1912212.eth, Foresight News

Protocol fee income is still one of the important data indicators to measure the activity, value capture and ecosystem of a chain. Recently, CoinGecko announced the TOP10 list of L1 and L2 protocol fee income in 2024. Ethereum and Tron ranked first and second respectively with more than 2 billion US dollars each. This data is equivalent to Ethereum earning an average of $6.79 million per day, while Tron earns $5.89 million per day.

Solana’s fee income reached US$700 million. The once popular TON was no longer popular, and only received US$35 million in revenue last year. BNB Chain's performance was mediocre, with only nearly US$200 million in revenue. Bitcoin fee revenue reached $920 million.

In terms of L2 data, Base is far ahead, with nearly $85 million in protocol fee revenue, which is even more than the combined data of Arbitrum and OP.

Ethereum protocol revenue rises, but currency price falls below

expectations

Chain fee income usually comes from many aspects, such as transaction fees, smart contract execution fees, indirect income from block rewards, MEV-related income, cross-chain bridge and asset transfer fees, on-chain storage fees, destruction mechanisms, governance fees, etc. .

Ethereum has significantly reduced L2 transaction costs and promoted its development since the Cancun upgrade, but this benefit has not resulted in a very obvious improvement in revenue. It even feels a bit like "sacrifice the small self to achieve the greater self". Ethereum protocol revenue will be $2.41 billion in 2023, and fee revenue in 2024 will only increase by 3%. Ethereum primarily earned $1.17 billion in the first quarter of 2024, accounting for almost half of its total fee revenue for the year. Although the data seems to be growing, the performance of this fee income is still unsatisfactory in view of the rise of the general market and the high expectations of the market.

The weak performance of the data is directly reflected in the price of ETH, which has fluctuated around $3,000 for most of the past year. The long-term stagnation of currency prices has also led to widespread dissatisfaction and doubts in the community. Vitalik and the Ethereum Foundation under his leadership have been plunged into a crisis of public opinion.

The income performance of each Ethereum L2 is also relatively average, and Base has become one of the few rising stars in Ethereum L2 that performs more brilliantly. This is thanks to its ability to firmly capture the meme wave and take off. In 2024, AI concept coins represented by VIRTUAL/AIXBT, etc., and meme coins such as DEGEN will emerge on the Base chain, and their wealth effects far exceed those of Arbitrum and OP. Although there is still a big gap with Solana so far, the potential cannot be underestimated.

The second-layer protocol makes money, but it does not really feed back Ethereum. Taking Base as an example, most of the network fees last year turned into CoinBase's profits, of which very little funds were given to the Ethereum main network. If calculated on an annualized basis, CoinBase's income from Base was close to US$100 million.

The money-making effect of the L1 mainnet is sluggish, and whether L2 can still become Ethereum’s “supersonic missile” is worth placing a question mark on.

Tron, Solana protocol single point breakthrough becomes the key to the

outbreak

As a stablecoin public chain, Tron protocol fee income will increase from US$922.08 million in 2023 to US$2.15 billion in 2024. As the main pillar contributing to protocol fees, its stablecoin revenue increased from US$38.36 million in January 2023 to a high of US$342.54 million in December 2024, an increase of nearly 10 times.

Solana's fee income also performed well last year, soaring from US$25.55 million in 2023 to US$750.65 million in 2024, an increase of nearly 30 times, far exceeding that of its opponents. The main sources of fees on the Solana chain are transaction fees and priority fees. The reason is self-evident. Since last year, meme coins and AI concept coins on the Solana chain have experienced a huge explosion, and the exaggerated wealth effect has attracted many users to come here.

Taking its issuance launch platform Pump.fun as an example, its cumulative revenue has exceeded US$400 million so far. Raydium, another memetic liquidity infrastructure, has annualized revenue of US$363 million. In the past three months, expenses have increased by more than 370% and revenue by more than 260%.

Bitcoin’s annual fee revenue grew 15.9% thanks to the 2024 Inscription boom. At the same time, TON will benefit from "playing and earning games" and will usher in its own highlight moment in the first half of 2024.

Conclusion

When we look back at the fee income of each year last year, it is not difficult to find that chains with greater increases and better performance often "seize the opportunity" and seize their own opportunities. The silence of L2, DeFi and NFT did not give Ethereum a chance to take off strongly. The two biggest crazes of memes and AI concept coins gave Solana a god-given opportunity to shine this cycle, and Tron benefited from the stablecoin funds. Influx and income surge.

However, some crazes come and go quickly, or even disappear forever, which will greatly reduce the sustainability of future fee income. For example, the 2024 Inscription and TON ecological games have not made any progress since their silence. When this part of the boom revenue fades, how to think about the next development is the key.

The key is to seize the opportunity when it comes, and if you are insufficient in the preparation stage, you may miss the opportunity. If Solana is still down frequently and the wallet and other user experience is extremely poor, it may not be able to wait for its good luck. If the scalability of the Ethereum mainnet is perfectly resolved as soon as possible, perhaps the meme wave may also occur on top of it and usher in its own headwind comeback.