KEYTAKEAWAYS
- By late 2025, Solana applications generated 3.5 times more revenue than the mainnet itself, with total application fees exceeding $4 billion annually.
- Ethereum's Layer 1 fee revenue collapsed to under 3% of total ecosystem income as EIP-4844 and Layer 2 adoption drove transaction costs down.
- Vitalik Buterin's strategy accepts lower revenue capture, focusing instead on making Ethereum the cheapest and most secure data availability layer for ecosystem growth.
CONTENT
Blockchain applications now generate more revenue than their underlying chains. Solana and Ethereum face this shift with radically different strategies for 2026.
Something fundamental shifted in the blockchain landscape during 2024, and the numbers tell a story that challenges everything we thought we knew about layer-1 value capture. Both Solana and Ethereum are watching their applications generate more revenue than the underlying chains themselves, marking what Galaxy Digital calls one of the most consequential trends heading into 2026.
The data points are striking, though perhaps not entirely surprising to those who’ve been watching closely. For Solana, June 2024 marked a watershed moment. That’s when application-layer revenue from platforms like Pump.fun and Jito first exceeded the chain’s own gas fee income. By the end of 2025, this ratio had widened dramatically to 3.5 to 1 in favor of applications. Throughout 2025, Solana’s applications collectively generated over $4 billion in fees, while the November ETF inflows of $420 million suggested that institutional capital was shifting from speculation toward genuine asset allocation.
Ethereum’s situation mirrors this dynamic, albeit with its own distinct characteristics. During the first quarter of 2025, applications running on Ethereum—think Uniswap, Lido, and Aave—produced approximately $1.01 billion in total fees. Meanwhile, the Ethereum mainnet captured only about one-fifth of what its applications were earning. The rollout of EIP-4844, which introduced blob space, combined with widespread Layer 2 adoption, drove average transaction fees down by over 95%. Layer 1’s share of total fee revenue, which once stood at 40% back in 2021, plummeted to less than 3%.
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THE UNCOMFORTABLE TRUTH ABOUT VALUE CAPTURE
These figures point toward an uncomfortable reality for blockchain infrastructure: applications have become better at capturing value than the chains hosting them. This isn’t just a temporary market anomaly or a brief period of misalignment. Rather, it represents a structural shift in how value flows through blockchain ecosystems, one that has profound implications for how we think about layer-1 tokens as investment vehicles.
The phenomenon supports what some researchers have started calling “application-layer supremacy.” However, the responses from Ethereum and Solana reveal two radically different philosophies about what a blockchain should be and how it should capture value. Messari’s perspective on Ethereum frames the issue as an identity crisis, questioning whether the network is becoming merely a “settlement dumpster” for Layer 2 chains. Their analysis suggests that by 2026, Ethereum must implement major upgrades—possibly mainnet sharding or other significant architectural changes—to reclaim execution-layer value capture.
From Messari’s viewpoint, Ethereum faces the risk of becoming a bargain-basement settlement layer. As Layer 2 fees have dropped to nearly nothing, the mainnet’s gas fee capture has cratered, undermining ETH’s deflationary narrative. This creates a zero-sum dynamic: if ETH wins, it means Layer 2s will funnel profits back to the mainnet, or applications will choose to remain on the mainnet despite higher “protection fees.” But if the application layer wins—as Galaxy Digital’s analysis suggests is happening—then applications will increasingly build their own chains or use app-chains to capture all the gas fees and MEV revenue that would otherwise flow to Ethereum. Uniswap’s launch of Unichain exemplifies this trend perfectly.
VITALIK’S COUNTERINTUITIVE STRATEGY
Yet Messari’s predictions about Ethereum’s comeback strategy appear to diverge from what Vitalik Buterin himself has been articulating in recent public statements. Looking at Vitalik’s comments from early 2026, it becomes clear that the Ethereum team isn’t planning to compete with applications for revenue. Instead, they’re doubling down on becoming cheaper and more secure.
Vitalik has repeatedly emphasized that Ethereum’s ultimate value doesn’t lie in how much gas it collects, but rather in how much “indestructible value” it hosts—meaning censorship resistance and uncompromising security. The 2026 roadmap prioritizes pushing forward PeerDAS and full zkEVM integration through upgrades like “Glamsterdam” and “Hegota,” with the goal of making Ethereum the cheapest and most secure data availability layer possible.
In other words, facing the reality of value being siphoned off to the application layer, Vitalik’s team has chosen not to fight applications for revenue but to continue making Ethereum better, cheaper, and more secure. The strategy is to attract more applications to deploy on Ethereum by being the best possible infrastructure. Think of it as being the soil that helps seeds take root, rather than competing with those seeds for nutrients.
This represents a fundamental identity shift for Ethereum, essentially abandoning the role of “profitable commercial company” in favor of becoming something like a “constitution for global digital territory.” While this transformation might frustrate retail investors who want to see faster price appreciation, it potentially appeals more to institutional players focused on long-term infrastructure value. The strategy accepts that Ethereum’s value proposition is evolving beyond simple fee capture toward something more foundational, even if that means sacrificing some near-term revenue in exchange for ecosystem growth and adoption.
