In-depth Analysis of Public Chain Income Sustainability: Ethereum, Solana, and Tron

Introduction

In today's rapidly developing blockchain technology, the revenue sustainability of public chains has become a key indicator for assessing their long-term development potential. This report focuses on the three major public chains in the current market - Ethereum, Solana, and Tron. By analyzing the composition of their gas fee revenue, on-chain economic activities, and user income and expenditure, it delves into the revenue models of these public chains and their sustainability.

According to the latest data, Ethereum leads by a total of $99.89 million in Gas fees over the past 30 days, followed closely by Solana and Tron with $46.21 million and $38.97 million in Gas fees, respectively. However, this revenue advantage has not fully translated into market popularity and user activity. It is worth noting that the discussion around Solana has surpassed that of Ethereum in the past six months, while Tron has gained wide recognition in the payment sector due to its low transaction fees.

More notably, the daily active address data presents a starkly different pattern from Gas fee revenue: TRON leads with 2.1 million daily active addresses, followed closely by Solana with 1.1 million, while Ethereum has only 316,000. This phenomenon highlights the complex relationship between Gas fee revenue composition, on-chain economic activities, and user income and expenditure sustainability, providing a unique perspective for our in-depth analysis of the income sustainability of these three major public chains.

Ethereum

Gas Fee Income Composition

Ethereum has undergone a series of significant upgrades, including the transition from Proof of Work (PoW) to Proof of Stake (PoS) and the implementation of the EIP-1559 proposal, which has had a profound impact on its gas fee structure. The new gas fee structure is divided into two parts: the base fee that is automatically burned by the system and the tips that are paid directly to validators. The burning mechanism of the base fee is expected to drive ETH into a deflationary state, potentially increasing its value. At the same time, the dynamically adjusted base fee helps optimize network resource allocation, while the tips provide additional incentives for validators to maintain network security.

In the past 30 days, Ethereum has burned approximately $47 million worth of ETH through the base fee mechanism. This data not only reflects the activity level of the network but also provides important evidence for analyzing the contribution ratio of various on-chain activities to the total Gas consumption.

on-chain economic activities

The distribution of Gas fee consumption on the Ethereum network reflects the activity level of its ecosystem and the flow of economic value. Decentralized Finance (DeFi) leads with a dominant share of 60%, highlighting its core position in the Ethereum ecosystem. Following closely are ETH transfers (12%), MEV (Maximum Extractable Value, 8%), and NFTs (Non-Fungible Tokens, 8%), which together account for 88% of the total Gas consumption. Layer 2 solutions (6%) and smart contract creation (2%) have a smaller share, indirectly indicating that the development of the Ethereum ecosystem is currently in a "low point."

In the DeFi space, Uniswap, as the largest decentralized exchange, generated revenue of 54.23 million USD in the past 30 days, with the contribution of burned Gas fees being 8.15 million USD, accounting for approximately 17.3% of the Ethereum ecosystem. 1inch, as a leading DEX aggregator, contributed about 1.21 million USD in Gas fees, accounting for 3% of the total. The entire DEX sector accounts for over 40% in the DeFi space and over 25% in the Ethereum ecosystem.

Stablecoin transfers, as a key indicator of blockchain prosperity, rank second only to DEX in the Ethereum ecosystem. In the past month, the gas fees burned related to stablecoin transfers on the Ethereum chain reached $4.01 million, accounting for approximately 8.5% of the total gas fees burned during the same period.

The rise of the Dex Trading Bot track is attributed to the popularity of Meme coins. In the past 30 days, the two major projects, Banana Gun and Maestro, contributed a total of $1.73 million and $1.51 million in Gas fees respectively, accounting for 6.89% of the total Gas fees in the Ethereum ecosystem.

MetaMask, as the most widely used on-chain wallet project, has contributed $2.91 million in Gas fees (burning $940,000) over the past 30 days, accounting for about 2% of the total Gas fees on the Ethereum chain.

In the past month, $3.83 million in Gas fees have been burned on the Ethereum chain, contributing an estimated total of about $25.5 million in Gas fees, accounting for approximately 12% of the total Gas fees in the Ethereum ecosystem.

MEV, as a unique phenomenon during the blockchain transaction processing phase, has a burning fee of approximately $3.76 million on the Ethereum chain, accounting for 8% of the total burning fees on the chain.

Ethereum ecosystem summary

The Ethereum ecosystem shows a diversified but concentrated development trend in several key areas. The DeFi sector leads with a 60% share of Gas fees, highlighting its core position, although the distribution among internal sub-sectors is reasonable. ETH transfers (12%), MEV (8%), and NFTs (8%) follow closely behind, with these four categories accounting for a total of 88% of Gas consumption. The sub-sector with the highest on-chain Gas fee burning is DEX (26%), followed by on-chain transfers and stablecoins (17%), Dex Trading Bots (7%), and the wallet sector (3%), totaling a share of 53%. Although Layer 2 solutions (6%) and smart contract creation (2%) have a relatively small share, reflecting that the ecosystem's development may be in a "trough period", the overall distribution of Gas fees still reflects a relatively balanced development of various sectors within Ethereum, showcasing the overall health of the ecosystem.

Solana

Transaction Fee Composition

The fees and costs on the Solana chain can be divided into three parts: transaction fees, priority fees, and rent. The Solana chain mandates that a fixed percentage of each transaction fee (initially 50%) is burned, while the remainder belongs to the validators. Stakers on Solana have earned transaction fee rewards worth $23.1 million in the last 30 days.

The popularity of Meme coin projects on the Solana chain has led to extremely high sensitivity to transaction times, prompting users to significantly increase priority fees to gain an advantage, thereby significantly increasing the fee and bribe income for Solana stakers.

On-chain economic activities

The DEX activity on the Solana chain holds an absolute dominant position, accounting for up to 86% of the market share. Raydium and Orca, the two largest decentralized exchanges in the Solana ecosystem, generated trading fees of $52.37 million and $12.25 million respectively over the past 30 days, with most of the revenue coming from Meme coin trading pairs.

The MEV (Maximal Extractable Value) mechanism on the Solana chain is showing a new trend of development due to the surge in demand for Meme coin trading. In the past 30 days, transactions with priority fees (MEV) accounted for 82.45% of the total transaction volume, and MEV fees made up as much as 80% of the transaction fees, with specific data showing that MEV fees exceeded 30 million USD.

The Dex Trading Bot is also performing actively on the Solana chain, with the top three projects (Photon, Bonkbot, and Trojan) accounting for over 90% of the trading share on this chain, and total revenue of approximately $33.67 million in the past 30 days.

Solana ecosystem summary

The current ecosystem prosperity model of Solana, driven by meme coins, has significant sustainability risks. Although meme coin trading has brought considerable on-chain activity and revenue to Solana in the short term, this model imposes a huge economic burden on participants. Monthly losses exceeding $100 million for fixed players, annualized to $1.3 billion, highlight the unsustainability of the current model.

The Solana ecosystem is facing severe challenges and needs to seek a more balanced and sustainable development path, reducing reliance on a single, high-risk sector, and nurturing applications and projects that can create long-term value, to ensure the healthy development and long-term prosperity of the ecosystem.

Tron

The Tron chain has a unique design, where the on-chain transaction fees are mainly used to compensate for network energy and bandwidth consumption, rather than for node bribery. Users must burn TRX to pay for transaction resources when bandwidth or energy is insufficient, promoting TRX deflation.

Since October 29, 2021, the circulation of TRX has shown a continuous deflationary trend, mainly due to the widespread use of USDT on the Tron network and the significant increase in its trading volume. The ongoing expansion of stablecoin transfer activities provides strong support for the deflationary mechanism of TRX, ensuring the sustainability of TRX's economic model.

Data from July 22, 2024, shows that USDT transfers account for 94.51% of activity on the Tron chain, highlighting its absolute dominance in the Tron ecosystem. The design advantages of the Tron chain, including a fixed low transfer fee of 1U, a rapid block time of 3 seconds, and no need to pay additional priority fees, give it a significant competitive edge in the field of on-chain payments.

In August 2024, Tron founder Justin Sun strategically announced his entry into the Meme track, quickly attracting a large number of Meme projects to settle in the Tron ecosystem. As of August 20, the energy consumption structure on the Tron chain has undergone significant changes: the proportion of USDT transfers has dropped to 52%, while the proportion of decentralized exchange (DEX) activities has surged from the previous 3% to 47%.

Although the proportion of USDT transfers has significantly decreased in the overall ecosystem, its actual energy consumption remains stable, staying in the range of 80B-90B. This phenomenon indicates that despite the introduction of Meme projects greatly increasing on-chain activity, it has not substantially affected the core business of the Tron ecosystem—USDT transfers. This structural resilience provides strong support for the long-term development of Tron.

Although the fee income on the Tron chain is highly concentrated in USDT transfers, this concentration reflects the rigid demand from users for stablecoin transfers. Coupled with the huge income from stablecoin transfers, it not only highlights users' high reliance on the Tron network but also confirms the health and sustainability of the fee income structure of the Tron ecosystem.

Summary

This report provides a deep analysis of the revenue composition and sustainability of the three major public chains: Ethereum, Solana, and Tron, and concludes with the following key findings:

Ethereum: Showcasing the most balanced and sustainable development model

• Diversified sources of income: balanced development across multiple fields such as DeFi (60%), ETH transfers (12%), MEV (8%), and NFTs (8%).
• Ecosystem Health: A reasonable proportion of core applications such as DEX and stablecoin transfers reflects genuine and ongoing user demand.
• Innovation and Upgrades: Upgrades such as EIP-1559 optimize the fee mechanism, creating long-term value through ETH burn.
• Long-term potential: Diverse application scenarios and ongoing technological innovations provide strong long-term development momentum for Ethereum.

Solana: Rapid growth but facing sustainability challenges

• Income is highly concentrated: DEX activities account for 86%, among which are Meme coins.