According to a research director at ARK Invest, the cryptocurrency market is currently experiencing a significant shift, with three protocols emerging as dominant players in revenue generation within the industry.
ARK Invest’s Lorenzo Valente reveals that three protocols are responsible for nearly 80% of all crypto application revenue.
Hyperliquid (HYPE) and Pump.fun (PUMP) together contribute to around 67% of the total app revenue, with Ethena (ENA) completing the top trio to reach close to 80% market share.
Valente notes that capital is now being directed towards projects with strong product-market fit, while teams and exchanges lacking this advantage are facing closures or acquisitions.
This trend is observed across various aspects of the industry, including applications, middleware layers, and layer-1 blockchains.
Valente states,
“I believe crypto is going through the biggest consolidation phase in its history, far more profound than in previous bear markets.
The market structure has changed. Capital is much more selective, and teams and exchanges without real PMF are shutting down…
I expect this to intensify over the coming months: much more M&A, Chapter 11 filings, shutdowns, and acqui-hires.
This is extremely bullish for the space.”
Valente implies that crypto investors are shifting away from speculative projects towards protocols with strong fundamentals, indicating a maturing market.
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