According to a recent report by asset manager VanEck, blockchain revenues declined by 16% in September as the volatility of digital asset markets subsided.
The reduction in network charges in popular blockchains, including Ethereum, Solana, and Tron, signaled a decline in trading levels and a decrease in high-priority transactions.
Major Networks See Lower Revenues
Ethereum network revenue also declined by 6%, as reported by VanEck, with Solana experiencing an 11% decline over the month. The most significant decrease in activity occurred in Tron, with a 37% drop in network fees. This drop was after a governance proposal was introduced in August, which reduced transaction fees by more than half. Consequently, the daily payments to the block producers of Tron, known as Super Representatives, fell to $5 million on September 7, marking the lowest level in over a year.
This reduction in revenue in these networks has been linked to a decrease in overall cryptocurrency market volatility. Ether lost 16% of its volatility compared to Bitcoin’s 26%. Blood volatility in Solana also decreased by 16%. Reduced market movement also implied reduced arbitrage opportunities, and traders paid less in fees. According to VanEck analysts, when volatility decreases, it typically indicates lower on-chain activity and reduced demand for block space.
Tron Remains the Top Revenue Generator
Though the figure dropped in September, Tron remained the top blockchain in terms of total revenue. According to the data provided by Token Terminal, the network has earned $3.6 billion in the last year. Tron received more protocol fees than Ethereum (435 million to 365 million, respectively) in the past 90 days.
The leader of Tron, Justin Sun, has recently highlighted the network’s success, noting that it generates more revenue than Ethereum, approximately 50% more. He stated that, given current trends, Tron could become the most profitable blockchain in the world, with its annual protocol revenue potentially reaching billions of dollars. Comparatively, Ethereum generated approximately $1 billion in revenue during the same time, although its market capitalization is larger at $539 billion.
Stablecoin Settlements Drive Tron Growth
Further control of Tron has been bolstered by the growing role of the coin in transactions involving stablecoins. Approximately half of the USDT supply is currently on the Tron network. Based on statistics published by RWA. Stablecoins have become a significant aspect of blockchain applications, emerging as a leading force behind cross-border payments and on-chain settlements.
It is also reported that China is contemplating developing a stablecoin based on the yuan to facilitate the internationalization of the currency. According to sources reporting to Reuters, this would be a significant policy change in the country, as it would prohibit the trading and mining of cryptocurrencies, similar to what was done in 2021.
The reduction in revenues through blockchain shows the relationship between market volatility and network activity. Ethereum and Solana experienced relative declines, but Tron had a more pronounced impact on trading, particularly due to its fee change. Nevertheless, as it gains increasing stablecoin dominance, Tron remains the blockchain profit leader, despite the frothy crypto market.
