In the current competition among public chains, protocol revenue has become an important indicator for measuring the overall performance and development potential of the network. Simply put, protocol revenue usually refers to the fees paid by users for using network resources. Each public chain has its own unique economic model to achieve these revenues, which usually include transaction fees, resource consumption, etc., reflecting the network activity and user demand for its services. In this issue of TRON Knowledge Bureau, we will take you to understand the protocol revenue of mainstream public chains.
TRON, Ethereum, and Solana are the three major public chains that are currently attracting much attention. According to Token Terminal data, in the past 365 days, TRONs total protocol revenue was $1.62 billion, Ethereums was $2.09 billion, and Solanas was $179 million. In the past six months, TRONs total protocol revenue has exceeded Ethereum, reaching $942 million, while Ethereum and Solanas were $565 million and $135 million, respectively.
Specifically, the total revenue of the TRON protocol includes staking energy revenue, staking bandwidth revenue, burning energy revenue and burning bandwidth revenue. Among them, staking energy and bandwidth revenue account for a larger share of the total revenue of the TRON protocol, showing the importance of the staking mechanism and the unique resource model to the TRON network. The burning revenue corresponds to the destruction of TRX. The increase in this part of the revenue means an increase in the destruction of TRX and the intensity of deflation.
Stablecoin transactions are the main driving force behind the growth of TRON Protocols total revenue. As an important global payment network and blockchain infrastructure, the total market value of stablecoins on the TRON chain is as high as 62.9 billion US dollars, and the massive stablecoin transactions account for most of the network resource consumption. For example, on September 16, the total energy consumption of the TRON network reached 102.5 billion, of which about 88% came from USDT-related activities, and the transfer amount of USDT on the TRON network on that day exceeded 15.4 billion US dollars. In addition, the rise of popular applications such as SunPump has also significantly increased the consumption of network resources. On August 21, the total energy consumption of the TRON network reached 200.3 billion, and SUN-related contracts accounted for about 38%. These factors have jointly driven the steady growth of the total revenue of the TRON Protocol.
As one of the earliest smart contract platforms, Ethereum has maintained stable protocol revenue for a long time. In 2022, Ethereum successfully completed the transformation from Proof of Work (PoW) to Proof of Stake (PoS), changing the verification mechanism. However, the core of its revenue is still the Gas Fee paid by users, that is, the transaction fee. Validators receive block rewards by staking ETH and continue to benefit from trading activities.
Under the PoS mechanism, the fees paid by users when conducting transactions on the Ethereum network are divided into two parts: one part is destroyed through the burning mechanism introduced by the EIP-1559 proposal (base fee), and the other part is paid to the validator as a reward (tip). This structure not only provides continuous incentives for validators, but also reduces the supply of ETH through the destruction mechanism, potentially increasing its value. Especially when the network is congested, the gas fee will rise sharply. In the past six months, although Ethereums protocol revenue has been lower than that of TRON, it is still far ahead of most public chains with its strong developer ecosystem and numerous DeFi projects.
Solana is another public chain that has attracted much attention. Its protocol revenue relies on its fast transaction processing speed and unique fee mechanism. Solanas protocol revenue mainly comes from transaction fees, priority fees (improving the order of transaction processing), and rent (on-chain data storage). Solana stipulates that a fixed proportion of each transaction fee (initially 50%) is destroyed, and the remaining 50% belongs to the validator. Solanas protocol revenue is mainly driven by decentralized exchange (DEX) activities and Meme, while priority fees and maximum extractable value (MEV) mechanisms play a key role in driving revenue, highlighting its revenue model that relies on short-term trading activities.
The above comparison shows that the public chains have different sources of income and driving factors. TRON has taken a leading position among the mainstream public chains by virtue of its dominant position in the field of stablecoin transactions and its increasingly diversified income structure. Ethereum and Solana continue to demonstrate their strengths in different fields by relying on their respective technological advantages.
In general, protocol revenue is an important indicator for evaluating the long-term development of a public chain, reflecting the user participation, ecological activity, and sustainability of the public chain. Understanding the revenue structure and dominant factors of major public chains will help us better grasp the development trend and future potential of the public chain.
