2025 was defined by a stark divergence: structural progress collided with stagnant price action. Institutional milestones were reached and TVL increased across most major ecosystems, yet the majority of large-cap Layer-1 tokens finished the year with negative or flat returns.
This report analyzes the structural decoupling between network usage and token performance. We examine 10 major blockchain ecosystems, exploring protocol versus application revenues, key ecosystem narratives, mechanics driving institutional adoption, and the trends to watch as we head into 2026.
2025 has been a year of divergence between structural progress and market performance. While regulatory clarity and institutional validation have reached new milestones, price performance has stagnated. L1 tokens are a primary example, broadly underperforming despite a backdrop of accelerating political approvals and expanding institutional products.
Performance among leading ecosystem tokens has been weak, with almost every asset - excluding one or two outliers - posting negative yearly returns.
This underperformance contrasts with network fundamentals: seven of the eight selected ecosystems recorded Total Value Locked (TVL) growth in native token terms and four of the eight experienced a rise in daily activity.
However, this growth was not reflected in the base layers. Chain Fees were down for all eight ecosystems, confirming a clear disconnect in value accrual to the chains themselves.
YTD Change (%) | Ethereum | Solana | Avalanche | Cardano | BNB | Bitcoin | XRPL | Near |
|---|---|---|---|---|---|---|---|---|
| Native Token Performance | -10.20% | -29.34% | -61.56% | -50.85% | 24.88% | -3.25% | 3.68% | -63.15% |
| TVL | 24.00% | 56.86% | 156.25% | -13.77% | 27.69% | 7.46% | 38.89% | 82.46% |
| Daily Transactions | 10.60% | -30.80% | 766% | -56% | 227% | 65.60% | -22.81% | -8.52% |
| Chain Fees | -94.61% | -82.10% | -13.01% | -80.03% | -26.69% | -65.17% | -90.49% | -57.24% |
| App Revenue | -38.10% | -56% | 162% | 51.70% | 139% | 13888% | 7.50% | 190% |
| Monthly Active Developers | 9.30% | -2.18% | -2.46% | 3.69% | -6.26% | 19.76% | 7.41% | -4.46% |
Instead, value flowed to the application layer: six ecosystems saw app revenue growth, with ecosystems like Near posting a +190% increase. Despite L1s capturing 90% of the market share (in terms of market cap), they now only collect 12% of fees (down from 60% in 2025). This trend highlights the market's maturing selectivity, where value capture is increasingly isolated to successful apps rather than automatically accruing to the underlying Layer 1 token.
The macro backdrop for 2026 is structurally supportive, driven by expected rate cuts that should lead to reduced borrowing costs and theoretically, boost risk on assets liquidity.
The divergence between declining chain fees and growing app revenue in 2025 suggests that market structure could be heading toward an inversion in value capture. As L1 security and throughput become commoditized, capital will increasingly flow to the application layer to find returns, confirming that selective, application-level narratives will remain the primary sources of performance.
Bitcoin entered 2025 on a wave of optimism, buoyed by expectations of a more favorable regulatory stance under President Donald Trump. That enthusiasm, however, was short-lived, as renewed trade tensions - particularly tariffs on China and other major partners - reintroduced macroeconomic uncertainty and market volatility.
After surging to a record high of $126.2k - a rally propelled by unprecedented adoption, particularly among corporate treasuries - Bitcoin has since staged a sharp retreat as risk appetite wanes and investors reassess the shifting economic landscape. The asset is currently trading near $90.3k, down 3.45% year-to-date. Despite this price drawdown, Bitcoin’s market dominance has actually strengthened, climbing from 58.1% to 59.4%, indicating a flight to quality within the crypto sector even amidst the downturn.
Much of Bitcoin’s price appreciation from April to October was driven by the accelerating adoption of BTC by publicly listed companies. As the influx of new corporate entrants began to plateau, the momentum behind the rally lulled. This dynamic was starkly visible between August and November, where the slowdown in public company accumulation coincided directly with the easing of upward price pressure.
Bitcoin’s price momentum also began to stall in August, a shift likely influenced by long-term holders selling their assets. According to Whale Alert, since July, 25 whale addresses that had been inactive for more than a decade moved coins on-chain, suggesting profit-taking or repositioning by early holders. This reintroduction of long-dormant BTC into the market added incremental sell-side pressure at a time when broader demand was already softening.
One of the most dominant narratives of 2025 is Bitcoin’s decisive break from its traditional four-year market cycle. This divergence signals a fundamental shift in the asset’s market structure, driven by the surge in institutional participation. As professional trading strategies and deep-pocketed capital increasingly dictate market flows, Bitcoin’s price action appears to be evolving beyond the predictable, halving-driven rhythm of previous cycles.
2025 saw the institutional adoption of Bitcoin shift from spot ETFs to public treasury companies. While spot BTC ETF flows remained strong (with U.S. spot ETFs seeing an aggregate net inflow of $23.6B), public treasury companies saw a larger inflow for the last five consecutive quarters.
Today, 196 public companies have disclosed Bitcoin holdings. These digital asset treasury (DAT) companies typically aim to increase their BTC held per share through several mechanisms: issuing debt, acquiring BTC at a discount via locked-token arrangements with foundations or counterparties, or leveraging their existing crypto through lending and derivatives strategies.
However, the mNAV ratio - which measures a company’s market capitalization relative to its net asset value-has fallen below 1.00 for most DATs, including Michael Saylor’s Strategy. This deterioration limits their ability to issue new shares to buy more BTC. In certain edge cases, it may even incentivize companies to sell BTC to repurchase their own shares, reversing their intended accumulation strategy.
Despite these constraints, we expect both the number of public treasury holders and their aggregate BTC holdings to continue rising over time. At the same time, we anticipate larger, more capital-efficient players will begin acquiring smaller or less efficient DATs as the sector consolidates.
On the ETF side, while recent large outflows have coincided with local market tops, we expect continued net inflows in the coming year as access to digital assets broadens. The integration of crypto ETFs into mainstream platforms operated by large asset managers, including firms such as Vanguard, reduces friction for institutional allocators and expands the potential investor base.
Currently, ETFs and DATs collectively hold about 12.8% of the total BTC supply, with global ETFs accounting for 7.42%. This reflects a 35% increase from the start of the year.
Assuming a similar growth rate in institutional adoption of BTC, we expect the combined ETFs and DATs holdings to reach 15% - 20% by the end of 2026 - continuing to absorb BTC at a rate that exceeds new supply, resulting in a higher institutional share of free float.
KPIs to monitor:
While BTC has managed to perform well at times in 2025, it has largely underperformed Gold in a year marred with macroeconomic uncertainty. The BTC/Gold price ratio has declined from 36 to 21 while the market cap ratio has fallen from 10% to 6%.
Analyzing the correlation between BTC and other major asset classes such as SPX, NASDAQ and gold, Bitcoin has behaved increasingly like a high-beta risk asset, not a clean hedge, especially in short horizons. This divergence was most pronounced during the peak of the tariff crisis, with BTC–SPX correlation exceeding 0.80 while BTC-gold correlation declined to roughly –0.75, suggesting Bitcoin was increasingly trading as a risk-sensitive asset rather than a defensive hedge during that period.
We expect Bitcoin to continue like a high-beta risk asset, rather than a hedge next year, demonstrated by higher correlation to risk assets (>0.6 with SPX) and weaker correlation with gold during stress regimes.
KPIs to monitor:
Bitcoin’s relatively long block times and limited throughput mean it remains an imperfect solution for everyday peer-to-peer payments - especially in a market increasingly dominated by stablecoins and high-performance alternative Layer-1s. While Bitcoin’s on-chain transaction count has dropped from the Ordinals-driven highs seen in 2024, activity remains meaningfully elevated compared to prior years. Network fees have also eased from last year’s peak, a trend that likely reflects softer transactional demand rather than major efficiency gains from protocol upgrades. Today, most miner revenues are generated from the block subsidy while transaction fees account for just 1% of the total revenue.
With each halving reducing the block subsidy - now at 3.125 BTC - miners are increasingly reliant on sustained Bitcoin price appreciation to remain profitable. In practice, Bitcoin’s price would need to reliably double every four years just to keep miner revenue flat, an increasingly difficult assumption. Reflecting this pressure, roughly 15 publicly listed mining companies have announced partial or full pivots toward AI-focused data-center infrastructure over the past two years. Among the world’s top ten miners, 7 of them are already relying on AI-related revenue to weather the bear market, with seven generating income from AI/HPC operations and the remainder in planning stages.
The underlying economics highlight why this shift is accelerating. Despite network hashrate reaching a record 1.1 ZH/s in October, Bitcoin’s price declined to around $81,000, pushing hashrate prices below $35/PH/s - well below the median public miner cost of roughly $44.8/PH/s reported in third-quarter filings. As a result, even the most efficient operators are operating near breakeven, with payback periods stretching beyond 1,200 days and financing costs continuing to rise.
Against this backdrop, the role of the broader Bitcoin ecosystem-particularly emerging BTC Layer-2 solutions and the growing BTCFi sector-becomes even more critical. These innovations have the potential to meaningfully increase on-chain economic activity and, by extension, transaction fees, which will be essential for the long-term sustainability of the mining industry as block rewards continue to decline.
With institutional accumulation now well-established, the narrative has shifted from simple exposure to capital efficiency. While institutions have validated Bitcoin as a strategic reserve asset, they remain bound by a fiduciary mandate to maximize returns. In traditional markets, capital is never allowed to stagnate: bonds accrue interest, equities distribute dividends, and even idle cash is swept into money market funds. Bitcoin, until recently, earned nothing.
The total value locked on BTCFi and BTC Layer 2s has reached nearly $8B in 2025 highlighting the rising demand and product market fit for this sector. However, not all BTCFi or scaling solutions contribute to transaction fees on Bitcoin. Some of these developments and improvements that make Bitcoin more practical as a payments layer, simultaneously reducing the revenue available to secure the base layer long-term.
The systems that matter most for miner sustainability are those that generate recurring, unavoidable, and economically meaningful on-chain transactions.
Stacks is a well-known example: its Proof-of-Transfer (PoX) consensus mechanism requires Stacks miners to make direct Bitcoin transactions to bid for the right to mint STX blocks. This creates persistent L1 demand tied to network activity.
Babylon is expanding rapidly as a modular BTC staking primitive. Babylon uses Bitcoin for two essential functions: checkpoint commitments where PoS chains post cryptographic checkpoints to Bitcoin L1 to inherit Bitcoin-grade security and staking commitments where stakers publish lockups, unbonding events and slashing-related attestations on Bitcoin.These operations occur frequently and at scale as Babylon expands to secure multiple chains. Babylon is the largest BTC associated protocol with a TVL of nearly $5B.
Emerging Bitcoin rollups like Citrea, and Bitlayer - enabled by innovations like BitVM - operate similarly to Ethereum rollups: They execute transactions off-chain, but post state roots, fraud proofs, or compressed data to Bitcoin L1 for settlement.
The next decade will determine whether Bitcoin can maintain a credible, market-based security budget after the block subsidy becomes too small to sustain miners. BTCFi ecosystems and scaling solutions that require Bitcoin L1 for settlement, proof, metadata, or consensus offer the most realistic path to long-term sustainability.
As a result, we expect BTC Layer 2s and BTCFi to demonstrate sustainable product-market fit, reflected in rising economic activity and TVL.
KPIs to monitor:
With the rollout of Bitcoin Core 30 in November, node operators using the software’s default settings began accepting unconfirmed transactions containing OP_RETURN data up to 100,000 bytes - a dramatic jump from the previous 80-byte limit.
The expanded allowance makes it far easier to embed non-monetary data, including large files like images, directly into the blockchain’s transaction structure. The increase in OP_RETURN is in response to people enabling data that exceeds 80-byte limit using alternative hacks such as fake spendable output taproot payloads or pushing data directly to miners by bypassing the mempool relay.
This sweeping change, made in a single step, sparked heated debate across the Bitcoin community, with many expressing concerns about its implications for blockspace usage and network resources. In response, a growing number of operators have migrated to Bitcoin Knots, a more conservative Bitcoin Core derivative. The shift has been significant: the number of public Knots nodes surged from around 400 to more than 5,000, now representing about 22% of all publicly reachable nodes.
While the debate around whether non financial data on Bitcoin blockchain is beneficial continues, data has proven that the likes of Ordinals has a significant impact on the Miner’s Revenues. At the peak of Ordinals back in April 2024, Transaction fees accounted for 50% of the miner revenues, a significant amount compared to the 1% contribution currently. As a result, the return of Ordinals and Inscriptions could revive transaction fees as a significant portion of miner revenue.
As alternative networks and stablecoins have proven to be better suited for blockchain-based payments, expanding the OP_RETURN limit to 100,000 bytes is likely to unlock richer use cases for protocols built on top of Bitcoin. Allowing more data per transaction increases design flexibility, enabling more expressive, feature-rich applications to be layered onto the Bitcoin network.
We expect Ordinals, Inscriptions, and related protocol innovations to be an area of interest in the coming year. Although Ordinals activity has remained subdued in 2025, a resurgence would be constructive for miner economics, boosting transaction fee revenue and helping offset the ongoing decline in block subsidy dependence.
KPIs to monitor:
Quantum computing has long been dismissed as a “forever-30-years-away” technology. But in 2025, that narrative broke. A sharp acceleration in quantum development - driven by dramatic gains in gate fidelity, viable error correction, progress in logical-qubit systems, and a surge in commercial research investment - has brought the prospect of a cryptographically relevant quantum computer (CRQC) into the realm of the plausible. For the first time, a machine capable of breaking elliptic-curve cryptography could realistically emerge in the late 2020s or early 2030s.
Governments are already acting accordingly: major national standards bodies are operating on a 2030-2035 transition timeline for post-quantum security, and the U.S. Defense Advanced Research Projects Agency (DARPA), through its Quantum Benchmarking Initiative, explicitly forecasts utility-scale quantum computing around 2033.
A CRQC would be catastrophic for Bitcoin’s current security assumptions. It would break ECDSA and Schnorr signatures by using Shor’s algorithm to derive private keys from visible public keys - compromising the foundation of Bitcoin’s ownership model. While Bitcoin’s hashing functions (e.g., SHA-256) remain quantum-resilient, the moment a public key is revealed on-chain, it becomes vulnerable. This includes not just the addresses where public keys already appear in the UTXO set, but also every transaction in flight: when a spend is broadcast, the public key is exposed, enabling a theoretical quantum “re-sign and steal” attack before confirmation.
Three major categories of Bitcoin already fall into the high-risk bucket:
Altogether, 32% of all circulating bitcoin - nearly $600B - is vulnerable the moment a CRQC comes online, and this number will only grow as more long-held coins are spent for the first time.
Bitcoin’s conservative approach to protocol changes means sweeping upgrades are rare, but not impossible. Past changes such as SegWit and Taproot show that Bitcoin can evolve when needed - though each required years of discussion, testing, and coordination. Given SegWit’s 2.5-year activation timeline and Taproot’s 3.5 years, the community would need to begin work soon on any transition toward quantum-resistant cryptography. This would likely involve evaluating candidate post-quantum signature schemes, introducing new address types, and initiating a voluntary migration path for users.
While 2026 is not expected to produce a quantum machine capable of breaking ECDSA - the rapid progress observed in 2025 makes it clear that the window for preparation is narrowing. As a result, we anticipate significantly expanded discussion, research, and early proposal work on Bitcoin’s post-quantum future beginning next year.
KPIs to monitor:
In 2025, Ethereum provided a bit of divergence between fundamentals and price action: ‘core’ fundamentals picked up while price action lagged and base-layer revenue collapsed.
As of December 1, 2025, ETH is down 10% year-to-date, underperforming BTC (down 3%). Despite this price weakness, Total Value Locked (TVL) rose from 25m to 31m ETH, while monthly DEX volumes climbed from $67B in Q4 2024 to $86B in Q4 2025. Stablecoin market capitalization also increased from $111B to $166B, confirming substantial new capital inflows into the ecosystem.
Despite the ecosystem’s growth, Layer 1 revenue (L1 fees) has declined from an average of $100M monthly to below $15M (Q4 comparison). Interestingly, app revenue (fees captured by dApps) has remained consistent over the past 12 months ($80M monthly). This divergence is a sign that Ethereum’s rollup-centric roadmap is working as intended.
This divergence confirms that Ethereum’s rollup-centric roadmap is working as intended, with network value capture intentionally shifting away from the base chain to Layer 2s, validating the utility delivered by key upgrades like Pectra (May 2025) and Fusaka (December 2025).
ETH’s price generally tends to move in line with Ethereum’s chain revenue i.e. a decline in trend or scale of chain revenue should result in the same for ETH price - going by historical trends. Q3 2025 saw a divergence as ETH price appreciation substantially outpaced the pickup in chain revenue.
This outperformance was driven by the inception of Digital Asset Treasuries (DATs) dedicated to holding ETH. This trend began in mid-July 2025 - initiating a sustained period of capital inflow. The subsequent decline in ETH price post October 2025 aligns directly with a slowdown in these institutional flows.
Collectively, these entities hold approximately 3.5% of the total circulating ETH supply, positioning them as significant drivers of ETH price action. Assuming a 90% decline in quarterly growth rates (given the QoQ growth rate growth has dropped from 200% (Q3) to -6% (Q4 - ongoing), a 90% decline is a relatively safe base case), institutions are still expected to capture ~4% of Ethereum’s circulating supply. Assuming no other real source of liquidity shows up, institutions will continue to play a role in ETH’s price in 2026.
KPIs to monitor:
The dominant position of Ethereum in stablecoin yield generation is evident not only in the comparative average yield across top liquidity pools on Ethereum versus Solana and 3-month T-bill rates, but also in supporting market metrics. The stablecoin market capitalization on Ethereum reinforces this narrative, growing significantly from an estimated $115B to $171B as of the end of November 2025.
This rate is maintained by protocols employing fundamentally different yield generation methods. Yields are sourced from three distinct categories:
Bullish environments tend to expand the spread between the funding rates (say on BTC) and treasury bill yields. Hence, the future of the stable yield narrative is tied to the macro environment and the performance of synthetic stablecoins, led by Ethena (USDe/sUSDe).
Ethena saw its TVL decline significantly in late 2025 (falling from $14.8B to $7.6B), driven by a decline in yield (to ~4.6%) that placed it below competing borrowing costs (like Aave's 5.4% USDC rate). This decline perfectly aligns with a softening basis trade and less aggressive funding rates in the crypto market.
An expected interest rate cut environment will cause Real-World Yields (RWA/T-Bill rates) to decline. This would make the risk-adjusted returns of synthetic stables more competitive. The core expectation is that as the crypto market sentiment turns bullish, funding rates will flip positive and spike, pushing Ethena's yields up, attracting capital, and driving its TVL back up.
Protocols like Pendle continue to serve as the most liquid proxy for trading this yield volatility, as its success is heavily dependent on the high yields of underlying assets like Ethena's sUSDe - given 41% of Pendle’s TVL at the moment is USDe or sUSDe.
This creates a clear risk: if crypto activity fails to pick up, crypto-native yields will struggle against off-chain yields, making a substantial portion of the stable yield market reliant on a renewed bull environment.
KPIs to monitor:
The on-chain lending market can be split into two distinct segments: Pure DeFi Money Markets for overcollateralized retail lending, and On-Chain Institutional Credit for direct loans to companies (private credit). This division suggests that no single protocol can currently dominate both, as institutional lending requires established relationships and a proven track record. This institutional segment is tapping into a massive opportunity, as private credit is a multi-trillion-dollar industry in traditional finance, offering a crucial source of non-RWA stable yield in DeFi.
Maple Finance (Syrup) is the current leader in this institutional space, with its TVL growing from $500M to over $4B. Maple provides unique structured credit solutions-fixed-term, crypto-backed working capital specifically for crypto-native firms, positioning it between traditional RWA and standard DeFi lending.
The protocol’s long-term potential is high, possibly targeting the prior CeFi lending peak of $69B. The expectation for 2026 is continued growth, potentially exceeding $10B in deposits.
However, the primary concern remains the risk of reputational harm and yield uncertainty stemming from incidents like the Maple/Core injunction. Despite these risks, Maple is expected to maintain its growth due to the essential nature of institutional lending and the current lack of viable competitors.
KPIs to monitor:
2025 saw continuation of dominance by monolithic lending protocols (particularly Aave) relative to modular lending protocols - which continue to maintain their 10% market share in terms of active loans on Ethereum.
The Ethereum decentralized lending market remains dominated by Aave, with active loans increasing from approximately $10B at the beginning of 2025 to $20-25B as of November. Aave has concurrently extended its market share from 71% to an approximate 82%.
The other real growth story has been Euler, which is a modular lending protocol and has seen its TVL going up from $200M to just over $800M this year. Euler now accounts for 30% of the market share on Ethereum within modular lending protocols (Morpho).
The growth of modular lending is closely tied to the role of Risk Curators - entities responsible for setting parameters and creating markets for new, exotic collateral. The TVL managed by these risk curators saw a significant pickup - growing from $1B at the start of 2025 to a peak of $10B.
This growth was sharply curtailed in Q4, with curator-led TVL declining to roughly $6B. This drop was directly linked to the fallout from the Stream Finance incident, which exposed vulnerabilities and systemic risk in these newly created, incentive-driven lending markets. This blowup confirmed the fragile nature of some pools and the dangers of over-reliance on incentives.
The expectation is that modular lending will continue to become more prominent, but its growth rate will likely moderate following the recent failures. The Stream Finance incident will likely lead to a necessary reduction in risk curator-led markets and a more cautious approach from liquidity providers. Despite the setback, the long-term thesis - that the ecosystem needs flexible, efficient lending rails for its expanding asset base - remains valid.
KPIs to monitor:
Looking at quarter by quarter app level revenue generated on-chain on a subset of chains (Ethereum, Avalanche, Solana, BSC, Bitcoin and Tron) reveals a structural trend toward a revenue-driven growth phase. Aggregate quarterly revenue has surged from $3.9bn in Q1 2025 to over $6bn in Q4 2025, validating the market's shift toward high-monetization protocols.
Interestingly, Ethereum’s share of app revenue has been gradually going down since the start of 2024 - down from 50% to just 25% in Q4 2025.
Ethereum’s ecosystem revenue is concentrated around lending, liquid staking (and re-staking) and yield generation protocols, as evident by total revenue earned by protocols in 2025 (chart below).
When you apply the context of emissions/incentives being given - the net figure looks different. For protocols where incentives data is available (via DeFillama), only three out of seven are actually profitable post incentives (Lido, Sky and Aave). This raises concerns regarding the long-term revenue sustainability of the remaining protocols, which appear to rely heavily on subsidies to drive activity.
The market's shift toward a revenue-centric valuation framework represents a structural maturation, prioritizing protocols that demonstrate genuine commercial viability. We expect this trend to persist, ultimately filtering out projects that rely on unsustainable token incentives to mask a lack of organic demand. While a prolonged sector downturn remains a theoretical risk, the robust growth observed over the past year renders a bearish reversal unlikely in the near term.
KPIs to monitor:
The tokenization of Real-World Assets (RWAs) was a core growth narrative in 2025, driven by both institutional adoption and the creation of crypto-native financial primitives. The overall value of tokenized RWAs grew significantly, increasing from approximately $291M to $669M over the past year, with nearly half of that value currently residing on Ethereum.
Ethereum is the preferred settlement rail for compliant institutional capital and public markets, with 50% of all total value of tokenized stocks being on Ethereum.
BlackRock's BUIDL Fund became the benchmark for the tokenized U.S. Treasury market. It went from $615M to peak near $2.9B by mid-year, commanding over 40% of the tokenized U.S. Treasury sector.
Tokenized Equities: Platforms like Ondo Finance ($349.1M total value) and Backed Finance (xStocks, $163.9M total value) facilitated the launch of blue-chip equities like Apple ($AAPL) and Nvidia ($NVDA).
The RWA opportunity is vast (potentially multi-trillion-dollar) due to clear advantages like fractionalization and 24/7 markets. With BTC (and broader crypto) underperforming stocks year to date (BTC being down -3% while SP500 up 17%) - the expectation is that assuming this trend continues, even crypto native entities would likely be open to trading more equity - especially given that some of the platforms allow for permissionless trading.
While growth is expected to continue, current trading volumes remain extremely low (less than $1m a day for tokenized stocks on Backed Finance), highlighting the nascent stage of the asset class.
KPIs to monitor:
Privacy protocols saw clear activity spikes, confirming a persistent user base that values anonymity. Ethereum-based privacy protocols such as Railgun saw its TVL go up from $75m to $90m while privacy-based DEX aggregator Houdiniswap saw volumes increase significantly, rising from approximately $916M to over $2B this year.
This is compounded by the success of platforms that integrate privacy at the infrastructural level, such as the Brave browser. Brave has scaled to 104M Monthly Active Users (MAUs) and 46.3M Daily Active Users (DAUs), demonstrating real user growth. The associated token (Basic Attention Token - BAT) has somewhat been responsive to this growth - with the token up 13% since the start of the year.
Brave’s integration of the ZCASH shielded transaction feature on the Brave Wallet and its built-in Leo AI - which analyzes webpages without retaining user data or relying on third-party ads - aligns the protocol with the narratives of Privacy x AI.
The second half of this narrative is the integration of crypto holdings into daily life, which is currently centered on crypto-linked debit cards ("cash cards") provided by centralized and semi-decentralized entities. The on-chain side of this utility is captured by the growth in Crypto Card volumes (deposits and spends). While currently dominated by centralized providers (EtherFi, Gnosis), the trend shows a clear demand for users to utilize their holdings.
The core expectation is the merger of these two themes: users will value privacy coupled with the ability to spend/utilize their holdings with the least friction. Future growth depends on the emergence of new, decentralized "neobanks" that can successfully offer private on-chain spending with the convenience and regulatory framework of traditional financial cards.
The sustainability of crypto-linked payment cards ("cash cards") presents a core financial concern, primarily revolving around the associated take rate. These platforms necessitate extremely large daily transaction volumes for their business model to be viable.
Should the current monthly transfer volumes fail to increase significantly, the economic model for these cards, particularly for emerging decentralized "neobanks," may prove unsustainable. Despite this inherent dependency on scaling transaction volume, the prevalent trend suggests an expectation that monthly transfer volumes will continue to increase over the coming year.
KPIs to monitor:
For Cardano, 2025 was defined by a struggle on both market and DeFi fronts. The asset was a market laggard, with ADA falling 51% YTD, significantly underperforming BTC, ETH, and other major L1s. This price action was reinforced by declining DeFi metrics: Total Value Locked (TVL) fell 15% (from 536M to 472M ADA) and Spot DEX volumes plummeted 77% for the year.
Despite the market struggles, the network showed consistent commitment to its research-driven roadmap. Monthly active developers saw a slight increase from 654 to 680 this year, with Cardano (278) maintaining a competitive ranking above chains like Optimism and BNB Chain in terms of full-time developer count.
2025 also marked Cardano's successful transition to fully decentralized governance, with the key catalyst being the Plomin Hard Fork on January 29, 2025. Plomin finalized the implementation of the CIP-1694 governance model, enabling the full set of governance actions and activating the Delegated Representative (DRep) role.
The Foundation launched the DRep Delegation Program, initially allocating 140M ADA to Developer and Builder DReps. A planned expansion was revealed in September, allocating a further 220M ADA to Adoption and Operations DReps in early 2026. To increase accessibility, the Foundation released an open-source voting tool and partnered with Griffin AI to launch the Proposal Examiner.
The Cardano Foundation's roadmap for 2026 clearly signals a targeted shift to address the DeFi and RWA adoption gaps:
Interoperable, Programmable Tokens: The focus will be on addressing network standards to grow the RWA sector. This includes completing and promoting CIP-0113 and CIP-0143 to enable fully interoperable and programmable tokens on the network.
Next-Gen Payments: The Foundation will work with the Masumi team to adopt the latest x402 payments framework. This internet-native solution aims to facilitate simple, seamless agent-to-agent payments and remove friction from the user experience, supporting the long-term goal of DeFi adoption.
The primary technical narrative for Cardano in 2025 was the push for commercial-grade scalability, moving the ecosystem past its foundational development phases and directly addressing long-standing criticisms regarding speed and throughput.
The development of Hydra, Cardano's Layer 2 scaling solution (off-chain state channels), was the network's most significant technical milestone. The narrative centered on Hydra enabling fast, low-cost off-chain transactions, demonstrating a credible path to unlocking high-speed applications like decentralized gaming, micro-payments, and high-frequency DeFi.
Hydra v1 is currently production ready and its use in Midnight’s (privacy based blockchain) token generation event (NIGHT token) in Q3 2025 demonstrates its readiness for development grade applications. Hydra is expected to see continued adoption by builders within the Cardano ecosystem and become a more prominent part of the blockchain ecosystem in 2026.
KPIs to monitor:
The expansion of the Bitcoin financial ecosystem (BTCFi) was a strategic narrative for Cardano in 2025, driven by the goal of accessing Bitcoin's liquidity.
Cardano positioned this expansion using its Extended UTXO (eUTXO) architecture for integration. The network's BTCFi focus was on eliminating centralized risk inherent in traditional bridges by developing cryptographic solutions.
This included a BitVM Bridge Partnership, where Cardano's L2, Sundial, partnered with Bitlayer to design a BitVM-based bridge. This architecture directly addresses distrust of centralized wrappers (like WBTC) by creating a secure, two-way channel that does not rely on third-party custodians for asset transfer.
Further UTXO-Native Innovation was seen in protocols like BitcoinOS, which demonstrated bridgeless BTC transfers via the BitSNARK protocol, issuing non-custodial xBTC that exists as native UTXOs on Cardano. Additionally, Fairgate's Cardinal protocol used BitVMX to bridge Ordinals to Cardano Native Tokens, leveraging the shared UTXO structure and verifiable cryptography.
The BTCFi narrative grants Cardano access to Bitcoin's liquidity, potentially providing an avenue that could see its DeFi TVL grow in the future. This process is validated by technologies like BitVM and BitSNARK, ensuring the integration maintains a cryptographically verifiable, high-assurance security standard aligned with both ecosystems. We need to see more of this implementation and data before coming to conclusions on how beneficial this can be for Cardano.
KPIs to monitor:
While Bitcoin and Ethereum ETFs were approved earlier in the cycle, anticipation for a Cardano ETF emerged as a key narrative in 2025. This was largely driven by NYSE Arca’s February filing to list the Grayscale Cardano Trust ETF (GADA). The SEC’s formal acknowledgement initiated the review process, further signaling interest from institutional players.
Throughout mid-2025, prediction markets consistently priced the odds of an ADA ETF approval at high levels (e.g., as high as 95%), signaling strong market confidence in Cardano's ability to clear regulatory hurdles.
The SEC's final decision deadline for the Grayscale ETF was widely anticipated for October 26, 2025. However, due to external factors, the final ruling has been postponed and is now expected to fall into 2026.
As of late 2025, the ETF has not yet been approved. Institutional interest is evident through various pending applications (including Grayscale, VanEck, and Hashdex).
2026 Expectation: The final ruling is now expected to be part of a wave of altcoin ETF decisions in early 2026. This outcome will likely serve as a significant catalyst, making the ETF approval status a critical monitoring KPI for the start of the next year.
KPIs to monitor:
Midnight is Input Output’s privacy‑focused “partner chain” for Cardano – a zero‑knowledge L1 designed to offer what the company describes as “rational privacy,” or selective, programmable data protection that can satisfy both users and regulators.
Midnight’s core thesis is that most real‑world blockchain use cases require nuanced privacy, not total transparency or full anonymity. The network uses zero‑knowledge proofs to separate public and private data, allowing applications to selectively reveal information to auditors, regulators, or counterparties without exposing everything on‑chain.
As of late 2025, Midnight remains in an advanced pre‑mainnet phase.
The roadmap outlines a multi-gate rollout for 2026:
The utility and governance token, NIGHT, officially launched as a Cardano Native Asset on December 4, 2025. The launch, framed as the Hilo phase, provides immediate liquidity and enables future governance.
The Glacier Drop and Scavenger Mine distribution phases set an industry record for participation volume. The distribution registered over 4.5B NIGHT claims across more than 8M unique addresses. The dual-phase distribution targeted holders across eight major chains (ADA, BTC, ETH, SOL, XRP, BNB, AVAX, BAT) and was explicitly framed as having no VC or team allocation.
The dual-token model differentiates itself by establishing DUST (the shielded transaction fuel) as a non-transferable, decaying resource. This design choice is aimed at eliminating regulatory risks associated with anonymous value transfer, allowing the network to provide privacy for data without providing a shield for illicit uses.
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The original TypeScript-inspired language, Compact, was integrated into a comprehensive web-based IDE and later merged into the Minokawa language under the Linux Foundation Decentralized Trust (LFDT). This move reinforces the goal of abstracting ZK complexity and making development accessible to mainstream web developers.
The network secured a partnership with OpenZeppelin to develop smart contract libraries for the Compact language, including equivalents of standards like ERC20 and ERC721 adapted for the Midnight environment. This speeds up development and integration.
We expect Midnight to target product‑market fit in ZK‑native verticals – such as identity, compliance‑aware DeFi, and privacy‑preserving data markets – with Compact becoming a credible alternative to Solidity and Rust for developers who prioritise data protection.
KPIs to track:
XRP is a digital asset purpose-built for payments, powering the XRP Ledger (XRPL) - a high-performance Layer 1 blockchain engineered for fast, low-cost global value transfer. XRPL delivers native functionality such as a built-in decentralized exchange, multi-asset support, and robust operational reliability, making it well-suited for enterprise-grade payment networks.
Ripple is one of the few major tokens currently trading above its yearly open, delivering a 3.68% year-to-date return and reaching $2.16 as of November 30th - outperforming BTC, ETH, and SOL. The asset also set a new all-time high of $3.67 in July.
On-chain activity has shown mixed dynamics: total transactions have declined 7.81% compared to 2024, while chain fees have surged 212% year-to-date, with both metrics peaking in January. XRPL’s total value locked has continued to expand, rising 37.4% to $75.5M. Stablecoin market capitalization on the ledger has grown to $306M, dominated by RLUSD with a 77% share. The network has also attracted a wave of new stablecoin issuers, including Circle’s USDC, Quontoz’s EURQ and USDQ, StraitsX’s XSGD, Schuman Financial’s EUROP, Barza Crypto’s USDB and BBRL, and AUDFC Pty Ltd’s AUDD.
Real-world asset (RWA) tokenization on XRPL has reached an all-time high in 2025, growing to $208M in value. U.S. Treasury debt and private credit remain the largest categories, with $158M and $138M in TVL respectively.
Ripple has also continued strengthening the XRPL’s infrastructure to modernize its programmability and broaden its developer ecosystem. On June 30th, the XRPL EVM sidechain officially launched, offering full Ethereum Virtual Machine compatibility while maintaining seamless interoperability with the main XRPL. This advancement significantly enhances XRPL’s competitiveness by enabling more sophisticated DeFi and RWA applications that require a richer smart contract environment than the base ledger can natively support.
Ripple also introduced a permissioned DEX designed for institutional use cases, compliance-sensitive order flows, and regulated liquidity providers. A permissioned DEX allows network participants to define rules so that only approved users with the required credentials can interact with specific offers within a designated group, known as a Permissioned Domain.
When Ripple entered the industry, their focus was to modernize global cross-border payments using XRPL as a high-speed settlement backbone. Ripple has historically occupied a nearly uncontested category in enterprise payments as no other public blockchain had credible payments infrastructure, banking partnerships, licensing scope or serious regulatory posture.
Ripple’s early emphasis on compliance such as ISO 20022, enterprise integrations, fiat connectivity, and corridor depth gave it a first-mover advantage in global remittances and B2B payments. RippleNet has now partnered with over 300 financial institutions globally.
However, the rapid rise of stablecoins created open, global settlement rails accessible to any application, not just banks or remittance providers. This means Solana, Base, and other public blockchains are now able to offer real-time, near-zero-cost settlement without needing a corporate intermediary like Ripple. Moreover, 2025 also saw the rise of stablecoin chains like Tether backed Plasma and Stable, Circle’s Arc and Stripe’s Tempo have resulted in a more competitive blockchain payments landscape. Many of these chains, particularly Stripe’s Tempo, offer near-zero fees, instant finality, programmable compliance, and merchant networks that Ripple cannot fully replicate.
Over the past two years, Ripple has transformed its product strategy by building a comprehensive five-pillar institutional stack, evolving well beyond its original focus on cross-border payments. Anchored by the XRP Ledger, Ripple now operates across a significantly broader financial infrastructure footprint.
Custody: Ripple entered institutional custody at scale with its $250M acquisition of Switzerland-based Metaco in 2023, bringing with it 75 regulatory licenses worldwide. This was further strengthened through the acquisition of London-based Palisade, whose lightweight, high-speed wallet-as-a-service platform now complements Ripple Custody.
Payments & Stablecoins: In August 2025, Ripple acquired Rail - an enterprise-grade stablecoin payments platform with deep integrations into card networks, ACH, and domestic instant-payment systems for $200M. Rail serves as the foundation of Ripple’s expanded payments and stablecoin capabilities.
Treasury Management: Ripple’s purchase of GTreasury in October for $1B added a direct on-ramp into corporate liquidity workflows, positioning the company to sit at the center of enterprise treasury operation
Prime Brokerage: Ripple accelerated into institutional market infrastructure with the $1.25B acquisition of Hidden Road in April, rebranding it as Ripple Prime. Today, Ripple Prime processes $3T annually, moves $10B per day, and facilitates 50M transactions daily - instantly placing Ripple among the largest players in digital-asset prime brokerage.
Together, these acquisitions have expanded Ripple into four new business lines - payments, custody, prime brokerage, and stablecoins - substantially enhancing the scope and strategic value of its solutions. More importantly, Ripple is betting on the synergy of these components: a unified, closed-loop institutional stack that offers seamless payment, custody, compliance, and settlement infrastructure to fintechs and enterprises.
As a result, we expect Ripple to shift from being viewed primarily as a cross-border payments company to a full-scale digital financial infrastructure provider, with non-payments business lines contributing meaningfully alongside traditional ODL and P2P corridor revenue.
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Ripple introduced RLUSD in 2025 as a fully regulated, USD-backed stablecoin designed to operate natively on the XRP Ledger while integrating seamlessly with Ripple’s expanding enterprise infrastructure stack. Within its first year, RLUSD surpassed $1B in circulating supply - a milestone that underscores strong early demand and meaningful institutional and B2B adoption.
Today, RLUSD has a market capitalization of $1.26B, with 82% of the supply circulating on Ethereum and the remainder on XRPL. The supply concentration on Ethereum reflects Ripple’s strategy to tap into the deep pools of enterprise liquidity that already exist there. However, the launch of the XRPL EVM sidechain now enables RLUSD to move frictionlessly between Ethereum and XRPL.
This development is strategically significant: RLUSD on XRPL can reduce or even eliminate the dependency on XRP for corridor settlement - addressing long-standing challenges tied to XRP’s volatility and liquidity requirements. It also creates a gateway for more Ethereum-based capital to flow into the XRPL ecosystem as RLUSD adoption grows.
Ripple has partnered with Mastercard, WebBank, and Gemini to broaden RLUSD’s utility footprint. Notably, RLUSD now supports blockchain-based settlement for the Gemini Credit Card, and serves as a primary base asset for trading pairs on the Gemini exchange. Year-to-date, RLUSD pairs have generated $36.2B in centralized-exchange trading volume - highlighting the stablecoin’s rapid integration into institutional market structure.
Looking ahead, RLUSD is positioned for continued expansion as a core component of Ripple’s financial infrastructure. In 2026, we expect RLUSD to surpass $2.5B in market capitalization, driven by growing utility, deeper enterprise adoption, and its central role in Ripple’s payment and settlement ecosystem.
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Despite spending nearly a decade as a top-10 global crypto asset, XRP has long lacked many of the core features that define modern Layer-1 ecosystems due to a lack of native smart contracts on XRPL. Unlike BTC, ETH, SOL, and other leading networks, the XRP Ledger has historically been missing native on-chain yield opportunities, robust DeFi primitives, collateralized borrowing and lending markets, structured products, and institutional-grade vaulting solutions.
The absence of these foundational components has left a significant share of XRP’s supply effectively idle. This has resulted in one of the largest pools of dormant liquidity - across both retail and institutional holders - in the entire digital asset market. Consequently, XRP represents one of the most underdeveloped yet potentially high-value TAMs in the sector, poised for substantial activation as the ecosystem evolves.
The launch of Doppler Finance in February - introduced as the first XRPFi protocol - marked a watershed moment for the XRP Ledger’s evolving financial ecosystem. For the first time, XRP holders gained access to native yield opportunities through Doppler Vaults and Doppler Lending, unlocking functionality previously absent from the network.
Doppler sources its yields through a blend of CeDeFi-driven, institutional-grade strategies, including arbitrage and spot-perpetual basis trades, bringing sophisticated market infrastructure to the XRPL. In October, Doppler Vaults integrated into Bitget Earn, giving Bitget Earn users access to new yield XRP opportunities, securely and transparently. In parallel, the protocol generates on-chain yields via XRP lending markets and stablecoin-based yield mechanisms, creating a diversified and sustainable reward structure for participants.
In addition, the introduction of Extensions represents a major technical leap for the XRPL. Extensions allow developers to attach modular code to existing ledger primitives, enhancing functionality without requiring entirely new smart contracts. This approach preserves XRPL’s efficiency and security model while unlocking far more expressive on-chain logic.
The first Extension, Smart Escrows, enables developers to define sophisticated release conditions - such as notary approvals, credential-based authentication, or other programmable triggers - before an escrow can be unlocked. Smart Escrows are scheduled for release in Q1 2026, and will serve as the foundation for a broader programmability roadmap.
Following this milestone, Ripple plans to launch a full smart contract devnet, marking the most significant expansion of XRPL’s developer capabilities in its history and setting the stage for a new wave of advanced financial applications.
Recently approved Multipurpose Tokens, Credentials, and AMM Clawback make XRPL fit for institutional adoption by providing necessary identity, financial compliance and privacy features. As mentioned earlier, the total value locked of RWA on XRP reached a new all-time high in 2025. Today, there are 47 real world assets on the chain, accounting for $358M in TVL.
A native lending protocol (XLS-66) is also in development on XRPL, whereby users could lend and borrow supported assets, such as XRP, wBTC, and wETH, using single-asset vaults.
We expect the XRPFi ecosystem to reach a new all-time high in 2026, with total TVL surpassing $200M, supported by expanding yield markets, protocol adoption, and the rollout of new infrastructure primitives. In parallel, we anticipate the value of real-world assets (RWAs) tokenized on XRPL to exceed $1B, reflecting growing institutional participation and enhanced programmability on the network.
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Among major altcoins, XRP has consistently ranked among the strongest assets in terms of institutional and mainstream adoption, standing alongside BTC, ETH, and SOL. It’s therefore no surprise that XRP has become one of the largest digital-asset product markets by assets under management. Today, 24 structured investment products hold a combined $3.20B in AUM, underscoring XRP’s enduring appeal to both institutional allocators and sophisticated investors. The same trend is reflected in the popularity of XRP products on CME since its launch on the exchange in May, with $40B in volume traded across its three products.
This, coupled with the approval of generic listing frameworks which widens the scope for multiple assets to be included without additional bespoke rule-making hints at more ETFs for altcoins including XRP. This is important as the two of three largest ETF issuers in the U.S - Blackrock and Fidelity are yet to file for a XRP ETF, representing material untapped capital potential for XRP.
XRP was also one of the many altcoins that benefitted from the digital asset treasury company narrative. Several companies have adopted XRP as their core treasury asset with Evernorth, a newly formed U.S company building a $1.1B warchest to acquire XRP. To date, the company holds 473M XRP, accounting for 0.473% of the total XRP supply.
VivoPower was another notable name that acquired exposure to 211M XRP position through budgeted $100M acquisition of Ripple shares at an 86% discount. The company has since announced partnership with Doppler Finance and Flare to maximize return on crypto treasury strategy.
We expect to see an expansion in XRP ETP listings in 2026, alongside the launch of additional XRP-focused DATs. As yield opportunities on XRPL continue to develop through XRPFi, we also anticipate more DATs will allocate into the ecosystem to capture incremental returns.
KPIs to monitor for invalidation:
BNB Chain (BSC) was one of the standout L1s of 2025, successfully translating fundamental and technical strength into superior market performance.
BNB was up 28% through the end of November 2025, significantly outperforming BTC, ETH, and all other major L1s. Price performance was directly supported by accelerating fundamentals: TVL was up 27% year-to-date, and spot DEX volumes saw a 3x increase in Q4 compared to the previous year. This success translated to the application layer, with app revenue also seeing a 3x increase this quarter, reaching $55M.
This performance was enabled by fundamental re-engineering of the network through two major hard forks: Lorentz (April 2025) and Maxwell (June 2025).
Speed and Finality: The Lorentz upgrade reduced block latency for high-frequency trading applications. The subsequent Maxwell upgrade established a consistent 0.75-second average block time and 1.875-second finality. This drastic reduction in time-to-finality enabled on-chain order books to effectively compete with Centralized Exchanges (CEXs) on execution speed.
Cost Reduction: The combination of these upgrades resulted in a 90% decrease in network fees, settling around 0.05 gwei. This significantly lowered the barrier to entry for high-frequency algorithmic traders and served as a necessary precondition for the high-volume migration observed later in the year
The success of Perpetual Decentralized Exchanges (Perp DEXs) was the primary DeFi narrative for BNB Chain in 2025, driven by Aster DEX. Aster was arguably the largest narrative on BSC this year. It currently commands a significant market presence, with weekly volumes of approximately $42B, placing it at a level comparable to or even exceeding competitors like Hyperliquid. As of the end of 2025, Aster accounts for 20% of all global perps volume.
Perp DEX activity is highly seasonal and correlated with bullish crypto market sentiment. Assuming a bullish trend, Aster is expected to maintain its dominance on BSC and continue competing with global leaders like Hyperliquid and Lighter.
A major factor in this momentum is the continuation of its points program, which sustains activity by incentivizing a subset of entities to "farm" for the future token (a trend common across competitors).
As the main DEX on BSC, Aster's local dominance will likely persist - especially given the 2026 roadmap released by the team showcases the inclusion of private transactions (shield mode), RWA perps and fiat on/off ramp.
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As of November 2025, roughly 90% of all DEX volume on BSC is composed of long-tail tokens (i.e., non-utility tokens). This figure represents a major structural shift, with long tail tokens representing 60% of the market just 12 months prior. This highlights the meme/long-tail trade as a growing market narrative on BSC.
While launchpads like Four.meme contributed to this surge, seeing weekly volumes spike to a peak of $1.8B in October 2025, this growth was not sustained, dropping to under $300M by the end of November. This volatility makes centralized launchpads a less reliable proxy for the underlying long-tail trend.
The ultimate infrastructure play for this long-tail activity is the core DEX: Pancakeswap. Most of the trades originated by launchpads and speculative activity are ultimately directed to Pancakeswap.
Pancakeswap volumes surged from $5B weekly at the start of the year to $11B by the end of November (a 2x increase). This growth followed a major change in tokenomics earlier in the year, where daily CAKE emissions were cut from 29,000 CAKE/day to 14,500 CAKE/day.
With its improved tokenomics and status as one of the more competitively valued DEXs (from a Price-to-Revenue perspective), Pancakeswap is expected to be the most sustained proxy for exposure to the BSC meme/long-tail narrative.
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The Prediction Markets narrative was a highly dominant theme across crypto in 2025, led by Polymarket and Kalshi. On BNB Chain, Opinion quickly established itself as the local volume leader, though its underlying user metrics raise questions about the long-term sustainability of this dominance.
Opinion currently ranks as third in revenue on BSC (behind Pancakeswap and Four.meme) over the past 30 days. Initially built on Monad but launching its mainnet on BNB, Opinion combines an AI oracle with on-chain orderbook infrastructure. The core source of this volume surge is the OPINION Point System (PTS) weekly rewards program.
Opinion's high trading volumes contrast sharply with its low transaction count and user base. This low transactional depth implies one of two things: either the volumes are not organic, or the dollar value per user is extremely large (indicating whale dominance)
Prediction markets are expected to remain a dominant narrative in crypto. However, for Opinion specifically, its future viability hinges on converting incentive-driven volume into sticky, organic user activity, thereby establishing a non-incentive-based moat.
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The integration of USD1 on BSC was one of the more prominent narratives on the chain. USD1 - a dollar pegged stablecoin backed by U.S. Treasuries and cash equivalents, saw rapid adoption driven less by decentralized usage and more by massive capital injection tied to institutional and political relationships.
BNB Chain Dominance: BNB Chain was the core hub for this activity, maintaining a 68% dominance of USD1's market capitalization by the end of November 2025.
The stablecoin's launch and immediate scale were accelerated by the landmark $2B investment by Abu Dhabi's MGX fund into Binance, which was strategically closed using USD1. This transaction instantly established the stablecoin's initial liquidity and profile.
World Liberty Financial's association with U.S. political figures has introduced a distinct 'political alignment' narrative to the ecosystem. By hosting the primary liquidity for this U.S.-compliant stablecoin, BNB Chain gains a notable, non-technical advantage. This effectively creates a strategic buffer, serving as a bridge between the decentralized ecosystem and traditional, politically-adjacent finance.
One of the core beneficiaries has been Lista DAO (a lending protocol on BSC), where USD1 is currently the second most borrowed asset - indicating emerging DeFi utility.
Still, the expectation here is that growth of USD1 will continue to be driven by large, centralized, institutional flows (like the MGX deal), rather than organic DeFi usage.
The primary risk is political. Any major shift in U.S. political leadership or regulatory sentiment toward the stablecoin's affiliated figures could instantly jeopardize its compliance status and cause massive capital flight, given the centralized nature of the initial capital base.
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Solana entered 2025 with significant momentum, supported by exceptional on-chain activity and strong thematic tailwinds across memecoins, AI agents and next-generation market infrastructure. This surge in usage followed a breakout year in 2024, positioning Solana as one of the most dynamic ecosystems in crypto.
The year began with a dramatic acceleration in speculative activity, culminating in a January peak driven in part by high-profile cultural catalysts - most notably U.S. President Donald Trump issuing his TRUMP memecoin on Solana. This event accelerated user inflows and contributed to Solana reaching a new all-time high of $295.6, reinforcing its status as the ecosystem of choice for high-throughput, retail-driven flows.
However, this exuberance quickly gave way to a sharp retracement. The launch of several extractive token projects, including LIBRA, absorbed substantial liquidity from the broader ecosystem, weakening market depth and amplifying downside volatility. At the same time, renewed macroeconomic uncertainty - heightened by escalating tariffs, shifting rate expectations, and risk-off sentiment - placed further pressure on SOL’s price.
While Solana briefly recovered to the $260 range during the peak of the DATs narrative, the rally proved short-lived. As of the latest reading, SOL trades near $133, representing a -29.7% year-to-date performance - a reflection of both macro headwinds and ecosystem-level liquidity imbalances.
Despite this volatility, Solana’s foundational strengths remain intact. Network usage across DeFi, payments, consumer applications, and emergent agent frameworks continues to demonstrate resilience. While the total value locked in terms of USD value has dropped 35.3% to $18.4B, the TVL measured in SOL has increased 56.5% to near all-time highs at 138M SOL. The stablecoins market capitalization on the chain has surged by 186% to $15B.
Moreover, structural catalysts - from improvements in network reliability to the growth of internet-native capital markets and DePIN infrastructure - position Solana for renewed traction as market conditions stabilize. Solana still leads other networks in terms of active users, DEX trading volume, tokens created and App Revenue although these metrics have peaked earlier in the year.
Solana is approaching one of its most significant technical upgrades with Alpenglow, a next-generation consensus protocol proposed by Anza. The upgrade targets a dramatic reduction in finality - from ~12.8 seconds to 100-150 ms - positioning Solana among the fastest production networks. Alpenglow combines Rotor, an optimized data-propagation system, and Votor, an off-chain voting mechanism that removes vote fees, lowers validator costs, reduces on-chain data load, and enhances long-term scalability and decentralization. In parallel, SIMD-0411 proposes doubling the chain’s disinflation rate without reducing rewards or adding new incentives.
Solana is also expanding its real-world commercial presence through partnerships with PayPal, Shopify, Stripe, Visa, Cash App, and Western Union, with a strong focus on stablecoin payments and next-generation settlement infrastructure. Major fintechs are increasingly adopting Solana not just for DeFi, but as a primary low-cost, high-throughput payment rail. These integrations reflect a broader shift: Solana is evolving from a speculative trading ecosystem into a widely used, global-scale transactional network.
In 2025, Solana has also benefited significantly from institutional capital inflows through ETFs and digital asset treasury (DAT) vehicles - one of the key catalysts behind SOL’s rebound from its April lows to its September highs. Over the year, Solana-focused structured products recorded $3.42B in net inflows, solidifying SOL’s position as the third-largest digital asset by AUM, trailing only Bitcoin and Ethereum.
In the United States, six spot Solana ETFs have launched since November, all offering staking-enabled yield of roughly 7%, making them comparatively more attractive than BTC and ETH products. Collectively, these ETFs hold $638M in AUM, with Bitwise’s BSOL commanding an outsized 93% share, underscoring early concentration among institutional allocators.
Treasury adoption has expanded alongside ETF growth. As of December, 16 publicly listed companies have disclosed Solana holdings. Forward Industries stands out as the largest Solana-focused DAT, accumulating nearly 7M SOL - equivalent to 1.12% of total circulating supply - a strong expression of long-term institutional confidence in the asset. Other notable DAT participants include The Solana Company, DeFi Development Corp, Upexi, and Sharps Technology, each holding between 0.325% and 0.375% of total supply, further reinforcing Solana’s rising prominence within corporate treasury strategies.
With the approval of generic ETF listing language for digital asset products, we expect a broader range of Solana ETFs to receive regulatory clearance and begin trading. Combined with Solana’s attractive native staking yield, which enhances the productivity of ETF-held assets, we anticipate a meaningful acceleration in institutional inflows throughout 2026. For ETFs specifically, we project AUM to exceed $2B, while the share of SOL held by publicly listed companies is expected to rise from under 3% today to more than 5% by year-end 2026.
KPIs to monitor:
One of crypto’s greatest sources of future demand lies in hyperfinancialization. Assets that were once illiquid or inaccessible - equity stakes, real estate, even opinions - can now be tokenized and traded on digital markets. This shift is already underway: the total value locked in Real World Assets has doubled this year, surpassing $36B. McKinsey estimates that nearly $2T in assets are on track to be tokenized on-chain by 2030.
Within this broader shift, Solana is positioned to benefit from this trend as it offers a high-throughput environment suitable for frequent and low-cost settlement. Its architecture provides a programmable foundation for asset issuance that differs from contract-heavy models on other chains. Instead of relying on multiple custom smart contracts, Solana incorporates many of the building blocks for compliant asset management directly into its token standard.
This design allows issuers to define and enforce transfer rules, incorporate investor verification processes, automate certain reporting functions, and support more complex corporate actions with reduced manual intervention. These features aim to simplify asset administration while offering transparency and operational efficiency as more traditional assets move on-chain.
Alluding to this trend, the TVL of RWA on Solana has grown by 305% to $761M. While this represents a small share of the total RWA which is currently dominated by Ethereum, the data hints at high potential value capture in future. Meanwhile, Solana accounts for 36% of the tokenized stocks on-chain through its integrations with xStocks.
We expect RWA TVL on Solana to grow substantially in 2026, surpassing $2B, driven by accelerating adoption of tokenized financial products and enterprise-grade settlement use cases. At the same time, we anticipate Solana’s market share of tokenized equities to exceed 50%, supported by the network’s superior settlement performance and cost efficiency relative to alternative chains.
KPIs to monitor:
As global financial activity continues migrating on-chain - with the DEX-to-CEX volume ratio now surpassing 30%, Solana’s decentralized exchange (DEX) ecosystem is positioned to be one of the primary beneficiaries of this structural shift. Solana already leads the industry across DEX trading volume, active users, and new token issuance, reflecting the network’s advantage in throughput, latency, and cost efficiency.
While trading activity during the 2025 peak was heavily influenced by speculative memecoins and long-tail assets - representing nearly 90% of total DEX volume in January - this composition has shifted meaningfully. As of December, memecoins account for only 60% of volume, signaling a transition toward more diverse and higher-quality market participation across the Solana ecosystem.
The emergence of Internet Capital Markets (ICMs) and Ownership Coins, pioneered by MetaDAO, introduce a structurally more sophisticated form of on-chain trading by embedding governance, capital allocation, and legally enforceable execution directly into token design. Ownership Coins such as Avici and Umbra utilize futarchy-based governance systems that link market pricing to decision-making outcomes, while accompanying legal frameworks require the underlying entities to execute on proposals approved by token holders. In this model, trading activity becomes a mechanism for informed capital allocation rather than pure speculation.
Alongside these developments, high-volume speculative venues continue to play a central role. Pumpswap maintains roughly 40% of Solana’s DEX market share, with its fee mechanisms generating close to $1M per day in buybacks of the native $PUMP token - underscoring the scale of on-chain demand and positioning the protocol as one of the ecosystem’s most economically robust applications.
We believe speculation will remain a persistent feature of digital asset markets, and as overall conditions improve, the share of trading volume attributed to memecoins and long-tail assets is likely to rise accordingly. However, as the ecosystem continues to mature - driven by deeper liquidity, more sophisticated participants, and broader real-world use cases - we expect these assets to represent a smaller proportion of total market activity than what was observed earlier in the year, even if absolute volumes increase.
It is worth noting that a significant share of decentralized exchange activity on Solana now flows through aggregators, with Jupiter facilitating approximately 22.4% of total trading volume. In 2025, the protocol generated $157M in fees from its aggregator product alone. Jupiter also maintains a substantial footprint in Solana’s perpetuals trading market, holding roughly 50% dominance over the past six months. Although recent competition from Pacifica has begun to erode this share, perpetuals have still produced $833M in fees for Jupiter, with 25% of those fees distributed to the protocol treasury and JLP holders.
Beyond trading, Jupiter earns revenue from a portfolio of additional products - including Jupiter Lend, Prediction, Staked SOL, DCA, and Studio - which together have contributed roughly $250M in revenue year-to-date. At its current valuation, Jupiter trades at a price-to-revenue ratio of 4.03x, a level that appears comparatively attractive when measured against other major DEX platforms such as Hyperliquid (7.77x), Drift (5.34x), and Aerodrome (4.73x).
A notable development within Solana’s AMM landscape is the rise of Proprietary AMMs, which mark a meaningful evolution in on-chain liquidity design. By embedding optimized trading strategies directly into the runtime, PropAMMs remove the latency inherent in off-chain execution and deliver tighter, more competitive pricing - approaching the efficiency of leading centralized exchanges. As of today, PropAMMs represent approximately 50% of total DEX volume, with HumidFi emerging as the dominant player in this category.
Because protocols like HumidiFi operate without a user-facing interface, traders interact with them indirectly through Jupiter’s off-chain routing and quoting engine, which dynamically sources liquidity across PropAMMs and traditional pools. This architecture allows users to benefit from advanced, high-performance execution strategies while maintaining the simplicity of a unified trading interface.
While PropAMMs are generally not optimal for highly volatile or long-tail assets such as newly launched memecoins, we nevertheless expect PropAMMs to become the dominant AMM architecture on Solana, as measured by trading-volume market share. Their superior execution efficiency, tighter pricing, and integration with advanced routing systems position them to capture an increasing share of aggregate liquidity.
KPIs to monitor:
Despite Solana being the second-largest ecosystem for on-chain lending, its lending market remains relatively underdeveloped when compared with Ethereum, which anchors roughly $40B in TVL across its lending protocols. Given Solana’s clear dominance in trading, stablecoins, and DEX activity, lending remains one of the most structurally underserved verticals - where latent user demand significantly exceeds current protocol capacity.
Historically, Kamino has been the flagship lending platform on Solana, comprising a comprehensive suite of structured yield vaults, risk-managed automated strategies, and capital-efficient lending products. It currently holds $2.3B in TVL, representing approximately 70% of Solana’s total lending market.
The competitive landscape shifted materially in August with the launch of JupLend, developed in partnership with Fluid. JupLend has rapidly surpassed $1B in TVL, propelled by Jupiter’s unparalleled user moat. As the central hub for retail and institutional order flow - spanning DEX aggregation, perpetual futures, liquid staking, wallets, launchpads, prediction markets, and now lending - Jupiter’s ecosystem provides JupLend with distribution and engagement advantages that would struggle to be replicated by a standalone lending protocol.
While we anticipate JupLend will overtake Kamino in market share by the end of 2026, the competitive dynamics within Solana’s lending ecosystem are more likely to drive total market expansion rather than a winner-take-most outcome. Both Kamino and Jupiter are well-positioned to jointly broaden Solana’s lending TAM, attract borrowers migrating from other chains, and support a wider range of collateral types as the ecosystem matures.
Looking ahead, we expect Solana-based lending protocols to continue gaining market share relative to Ethereum, driven by Solana’s deep trading flows, growing stablecoin economy, and high user engagement. Within the ecosystem, JupLend is positioned to emerge as the dominant lending platform, benefiting from Jupiter’s unmatched distribution network and its central role in Solana’s broader user and liquidity funnel.
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Liquid staking has emerged as a major growth sector within the Solana ecosystem, with nearly $10B in TVL, though it still represents only 16% of global liquid staking activity across all chains. Solana has long offered a compelling staking profile - driven by attractive supply inflation dynamics that translate into yields near 7% APY - and liquid staking derivatives (LSTs) amplify this value by enabling staked SOL to be reused across DeFi for borrowing, lending, leveraged strategies, and complex yield construction. With 67.7% of all SOL currently staked, the LST sector still has substantial room to scale.
JitoSOL began 2025 as the dominant LST, leveraging MEV-powered rewards, early integrations, and first-mover advantage to capture 36% market share. However, as new LSTs have launched and matured, JitoSOL’s dominance has declined to 23%, reflecting a more competitive and diversified market. LSTs have also become a new avenue for DATs to deploy capital into the Solana ecosystem, exemplified by Forward Industries’ fwdSOL product.
A standout beneficiary of this trend is Sanctum, which is helping redefine Solana’s LST landscape. Unlike Ethereum - where Lido’s stETH controls roughly 60% of the market - Solana’s liquid staking ecosystem is far more fragmented, composable, and competitive. Sanctum’s mission is to enable an “infinite LSTs” environment, where potentially thousands of LST variants can coexist, all interoperable and fully liquid through Sanctum’s routing layer. This model allows validators, projects, DATs, and infrastructure providers to differentiate themselves by issuing bespoke LSTs that appeal to specific communities or yield profiles.
For example, while native staking yields are broadly uniform across validators, certain providers have introduced differentiated reward structures. Laine, for instance, distributed additional block rewards to laineSOL holders - resulting in yields more than double those available through standard native staking. This highlights the flexibility and innovation possible within Solana’s LST ecosystem and underscores why the sector is poised for further expansion.
We expect Solana’s liquid staking market share to expand from 10% to 15% in 2026, mirroring the growth trajectory observed in 2025. In parallel, the number of LSTs on Solana is projected to increase from 34 to more than 50, as developers, validators, and ecosystem participants continue to leverage Sanctum’s “infinite LST” architecture to launch differentiated staking derivatives.
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Solana’s stablecoin footprint expanded significantly in 2025, underscoring the network’s growing importance as a settlement layer for both retail and institutional flows. The total market capitalization of stablecoins on Solana surpassed $15B, reaching a new all-time high. More than 50 distinct stablecoins now circulate on the network, with USDC representing 69% of the total supply. Solana’s appeal is driven by its extremely low transaction fees and sub-second confirmation times, which make it an ideal environment for high-volume payments and capital movement.
USDC on Solana has emerged as Circle’s premier deployment for fast, low-cost on-chain payments and DeFi liquidity. Solana now leads all blockchains in monthly USDC senders, representing one-third of global active USDC users. Since October 2023, monthly USDC senders on Solana have grown 10x, from roughly 300,000 to more than 3M.
October marked a milestone month for USDC activity on Solana, with $626B in adjusted transaction volume - a 4.6x increase from the previous month and the highest level ever recorded. Peer-to-peer USDC transfers also hit a record $98B, further signaling the shift in user behavior.
The takeaway is clear: Solana’s stablecoin economy is transitioning from speculative trading toward real, utility-driven payment flows. The network’s combination of performance, cost-efficiency, and developer tooling positions it as one of the most important stablecoin settlement environments in the market today.
Solana’s 2025 partnerships with traditional payments and finance companies highlights the chain’s focus on distribution partners and embedded presence inside global fintech apps. In 2025 alone, Western Union announced its plan to launch U.S. Dollar Payment Token (USDPT), its new stablecoin on Solana. Cash App with 57M users announced their plans to enable USDC payments early 2026, all powered by Solana. Revolut has expanded its crypto payment tools by integrating Solana for direct transfers, withdrawals, and staking.
While Solana is likely to face competition from the new stablechains such as Stripe’s Tempo and Circle’s Arc, Solana has the advantage of being a consumer ecosystem with DeFi-native integration, consumer applications and millions of active addresses.
We expect Solana to further solidify its position as a top-tier global network for stablecoin issuance and payment settlement in 2026, supported by continued expansion in stablecoin supply and accelerating real-world transactional demand.
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Solana is uniquely well-positioned to support DePIN (Decentralized Physical Infrastructure Network) deployments where token incentives to crowdsource physical infrastructure like wireless networks, mapping, and sensors. DePIN applications require low fees, high throughput, and near-real-time settlement because devices continuously stream data and execute micropayments. Solana’s technical profile fits these requirements better than most chains, which is why it already hosts 70+ DePIN projects and millions of connected nodes.
However, the core today is tokenomics: high emissions are often required to bootstrap participation, which creates sustained sell pressure and weak token performance. Helium illustrates this well - the network recently reached an all-time high in annualized income after deciding to burn its MVNO (Mobile Virtual Network Operator) subscription revenue. Yet the token continues to decline, as emissions still outweigh revenue capture. This makes DePIN a high-potential but very forward-looking sector.
The whole DEPIN sector is currently a $12B market cap sector which the World Economic Forum projects to grow to $3.5T by 2028, highlighting the growth potential of the sector. One of the catalysts ahead for the DePIN sector is the upcoming humanoid robotics wave where crowdsourced physical data could improve AI perception and coordination, with blockchains handling incentives and settlement. Looking ahead, DePIN networks could become data and sensor layers for robotics and autonomous systems - a subsector now referred to as Decentralized Physical AI Infrastructure (DePAI).
DePIN’s fundamentals are improving, but tokenomics remain the gating factor. If that challenge is resolved over time, Solana is well positioned to be one of the core infrastructure layers supporting both physical networks and physical AI. Nevertheless, we expect Solana’s market share within the DePIN sector to expand from 12% to more than 15% in 2026, supported by a steady pipeline of new DePIN deployments and Solana’s technical advantages for real-world infrastructure networks.
KPIs to monitor:
AI Agents and foundational model tokens were among the most prominent narratives of 2024, with projects such as ai16z and Virtuals Protocol reaching peak valuations near $3B. However, the market cycle proved short-lived: as speculative enthusiasm faded, many of these tokens retraced more than 90% from their all-time highs.
Despite this correction, the broader technological arc remains intact. The global shift toward an agentic computing paradigm is unmistakable, and the convergence of blockchain infrastructure and AI agents is emerging as a compelling long-term theme. Blockchains offer critical primitives that address many of the structural limitations of autonomous AI systems - verifiable identity, permissionless coordination, transparent decision frameworks, programmable money, and instant settlement - all of which become essential in a machine-driven economy.
Solana is particularly well-positioned to serve as a foundational execution layer for AI agents due to its parallelized runtime, high throughput, sub-second latency, and minimal transaction costs. These attributes allow autonomous agents to operate continuously, execute high-frequency interactions, and manage real-time economic activity at scale. As a result, Solana - alongside Base - now hosts the largest number of on-chain AI agents, reflecting early developer preference and strong ecosystem alignment with this emerging frontier.
A rapidly emerging narrative in 2025 is the rise of the x402 protocol, which enables frictionless micropayments across the internet - allowing value to move as seamlessly as data packets. x402 represents a fundamental shift in payment architecture: moving away from human-mediated, subscription-based models toward real-time, machine-to-machine (M2M) economic activity. With x402, agents can pay per request for data, services, and model access - without API keys, pre-funding requirements, or custodial intermediaries. This unlocks entirely new use cases: AI agents can purchase market data in real time, autonomous systems can settle for computational resources instantly, and microtransactions become economically viable at massive scale.
Recent ecosystem data illustrates how quickly this paradigm is taking hold. While Base initially processed nearly 100% of x402 transactions, Solana has rapidly emerged as a major settlement layer for the protocol. Over the past month, Solana’s share of x402 activity has climbed toward a 50/50 split, and in recent days the network has handled more than 95% of total dollar volume. This shift reflects Solana’s inherent strengths - low fees, high throughput, and sub-second finality - which are critical for high-intensity machine to machine payment flows.
We expect AI agents and decentralized AI infrastructure to emerge as a defining theme in 2026, with Solana continuing to lead speculative and early-stage adoption within this category. The maturation of agentic systems, combined with Solana’s performance advantages, positions the network as a natural execution layer for autonomous economic activity.
Similarly, we anticipate x402-enabled micropayments to become a prominent narrative as machine-to-machine interactions gain traction. As integrations proliferate across AI agent frameworks, Solana is well positioned to overtake Base as the dominant settlement layer for x402 payments, supported by its low-latency, high-throughput architecture.
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The Zcash ecosystem experienced a breakout year in 2025, driven primarily by a resurgent privacy narrative that fueled a 458% rally. This momentum was mirrored in network fundamentals: shielded supply more than doubled (from 2m to 4.6m) and transaction levels rose from 21k to 45k, with shielded transfers accounting for 20% of total activity. Notably, ZEC briefly flipped Monero to become the largest privacy asset by market cap. As of late November 2025, ZEC held a 41.5% market share, positioning it just behind XMR (47%).
Shielded ZEC supply nearly tripled in 2025, reaching roughly 4.8M ZEC, or about nearly 30% of circulating supply. Z→Z transactions (shielded to shielded transfers that are fully private on both sides) have risen to 20% of network volume, up from low single digits three years ago.
Zashi served as a driver of these moves as it made privacy the default. The wallet auto-shields incoming funds, refuses unshielded spending, and rotates receiving addresses automatically.
This is the first time Zcash’s privacy UX feels consumer-grade. A typical user can shield, swap, and spend in under two minutes, and fee friction is negligible. As the shielded pool expands, the anonymity set strengthens, and each new user benefits from the privacy created by those before them and creates a compounding loop.
At current growth rates, Zcash is on track for shielded flows to overtake transparent flows by 2026, marking a structural shift in how the network is used.
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Zashi’s CrossPay effectively positions Zcash as a cross-chain privacy router. It enables users to spend ZEC privately while recipients settle in ETH, USDC, BTC, or other supported assets—bypassing the need for bridges and preventing metadata leakage.
This is powered by NEAR Intents, a system using a solver that pays the destination asset on the destination chain and receives ZEC from the sender’s shielded address. The solver never learns who the sender is. ZEC weekly volumes via Near intents have averaged over $100m in weekly volumes in November 2025 alone - accounting for roughly 12% of all Near intents volumes.
The expectation here is that given the interest in privacy and the longer term thesis around the importance of privacy, this metric will likely continue to rise - hence, monitoring it is a good proxy to keep tabs on ZCash’s cross chain interest.
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The ZCash developers fully believe that quantum computing will become a real threat for ZCash and other blockchains - even though there is no clarity on when this might happen.
ZCash’s shielded transactions already achieve post-quantum privacy in many cases - quantum adversaries cannot compromise on-chain anonymity. This is mostly due to ZCash’s use of zero knowledge proofs.
The only tangible concern for the protocol lies around the potential vulnerability of elliptic curve cryptography. As per the developers, “These cryptographic breakthroughs would put the soundness of our protocol in jeopardy, which would possibly allow counterfeiting or (somewhat equivalently) theft of user funds, though not necessarily pose a risk to user privacy”.
Quantum computing is not a 2025 narrative and may not even be a 2026 threat but it is an important narrative to follow - especially given the above context. Protocol designers at the electric Coin Company (developers behind ZCash) have spent time in the past year developing techniques in Zcash’s shielded transactions (for Orchard) for quantum recoverability.
The core integration here - a change in the way wallets work - is expected to be done in 2026. Post this integration, if quantum computers do suddenly appear then users can safely recover their funds.
Other improvements in the pipeline include working on a general purpose long-term storage protocol that allows users to fortify their (cold storage) funds.
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Despite AVAX price falling approximately 62% through November 2025 - a decline consistent with non-Ethereum/Solana alt-L1s - the network's adoption metrics showed positive growth. TVL increased from 49M AVAX to 123M AVAX while spot DEX volumes rose from an average of $6B to $10B (Q4 comparison).
This contradiction highlights that, fundamentally, the network succeeded in attracting capital and activity, with app revenue growing organically from $3.2M to $4.5M. This sustained increase in core utility suggests that the market volatility and price decline were driven by broader market deleveraging against speculative L1s, rather than a failure of the Avalanche network itself.
Avalanche's stablecoin market cap did not expand in 2025 (declining from $2.2B to $1.7B), but the composition shift was the primary narrative. This change signaled the network's successful pivot toward becoming the institutional-grade rail for Real-World Assets (RWAs).
New compliant stablecoins like BlackRock's BUIDL and Avant's avUSD now collectively account for over 20% of the top six stablecoins by market cap, eroding the dominance of older assets like USDC and USDT.
avUSD is paired with savUSD, a yield-bearing variant that integrates DeFi-native strategies with Real-World Assets (RWAs). This structure, designed for institutional-grade access, allows capital to earn compliant yield without leaving the Avalanche ecosystem.
Institutional players like Nonco built FX On-Chain, an infrastructure directly on Avalanche that automates compliant conversions between USD-backed and local currency-backed assets (e.g., AUSD). This eliminates off-chain friction, creating efficient rails for payments, remittances, and treasury operations.
Avalanche now supports over $700M in tokenized RWAs. The deployment of Grove's $250M on-chain credit (with Janus Henderson) and Skybridge's $300M in tokenized assets more than doubled the network's tokenized value, building on a roster that includes funds from Apollo, WisdomTree, KKR, and BlackRock.
BlackRock's BUIDL fund, issued via Securitize, brings U.S. Treasury ownership on-chain, and on Avalanche, it can be used as DeFi collateral through sTokens.
Avalanche attracted this institutional flow by offering sub-second finality for predictable settlement and launching key upgrades like Octane (which cut gas costs) and Firewood (which targets high-throughput state access). The Subnet architecture further enables institutions to deploy tailored, compliance-aware environments. The expectation is that this trend will sustain in 2026.
KPIs to monitor:
The Liquid Staking (LST) narrative on Avalanche in 2025 focused on transforming staked AVAX into highly flexible and scalable collateral. The sector saw robust growth, with the market leader Benqi increasing its staked AVAX from 20M to 33M this year.
This success was built on increasing LST utility, with platforms like Suzaku (230k AVAX in TVL) enabling users to restake their AVAX LSTs to secure emerging Avalanche L1s (Subnets) , which validates the network's modular architecture and its superior composability and speed.
The long-term value of LSTs lies in their role within on-chain capital allocation, which bridges the gap between basic DeFi yield and institutional-grade finance. Protocols like Upshift are emerging as specialized allocators, offering managed vaults that automate market-making and yield optimization.
More crucially, Upshift is developing a cross-chain prime brokerage that will allow users to borrow, lend, trade, and settle across chains using liquid-staked collateral, including OTC perps and structured swaps. Similarly, Turtle Club is positioned as a sophisticated distribution protocol aiming to offer a safeguarding layer in DeFi with collective due diligence, though its initial TVL saw a decline from 9M to under 4M AVAX by year-end.
This entire LST ecosystem also provides the necessary leverage and capital efficiency to fuel the RWA narrative. LSTs create productive capital from a static asset (staked AVAX); this capital is then used as collateral to interact with the RWA sector.
As the on-chain capital allocators (like Upshift) continue to mature, they will increasingly facilitate the deployment of this crypto-native capital into compliant assets, reinforcing the RWA narrative and scaling institutional exposure on Avalanche. The expectation is that the usability of LSTs will continue to expand into complex, institutional-grade products, confirming the essential role of LSTs in Avalanche’s capital stack.
The core concern here is: LSTs and LRTs have hit a stagnation point on other chains such as Ethereum - this is likely to happen on Avalanche too given the usability of LSTs is limited - and unless we see extreme growth in protocols such as Turtle Club/Upshift - would likely limit the upside for LSTs on Avalanche.
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Avalanche's spot DEX volumes saw material growth in 2025, rising from an average of $6B in Q4 2024 to over $10B in Q4 2025. The key narrative shifted to the dominance and market structure within this volume, favoring native protocols employing the concentrated liquidity and emissions models.
We also saw a tiny meme launchpad phase on Avalanche - The "Arena Phase" - a short-lived meme launchpad narrative on Avalanche - which has collapsed, with monthly volumes dropping sharply from a peak of $300M in May 2025 to only $3M in November 2025.
The market is increasingly dominated by two native protocols, Pharaoh (utilizing the ve(3,3) model) and Blackhole, which currently generate roughly equivalent trading volumes.
While volumes are similar, the structural expectation is that the Pharaoh ve(3,3) model will dominate the liquidity landscape over time, similar to the observed effect of ve(3,3) protocols (e.g., Aerodrome) capturing share against traditional Automated Market Makers (AMMs).
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The Gaming narrative on Avalanche in 2025 was dominated by the interest in Maplestory, though the lack of corresponding token activity suggests the narrative remains fundamentally unverified and unsustainable.
The primary driver was the MapleStory Universe (MSU), an Avalanche-based Massive Multiplayer Online Role-Playing Game (MMORPG), which delivered significant growth in user activity. Activity saw a huge jump in June 2025, with the ecosystem’s Monthly Active Wallets (MAW) increasing by more than 100% to over 1.36M from just 600,000 in May.
Despite the impressive user numbers, the narrative is challenged by the failure of these users to translate into sustainable, measurable economic activity:
Overall expectation is that this divergence between reported fundamentals for Maplestory and the token performance will likely continue.
KPIs to monitor:
NEAR is a high-throughput, low-latency layer-1 blockchain built with a strong focus on usability, scalability, and developer abstraction. Its architecture combines sharded execution, native account abstraction, a chain-abstraction layer, and AI-ready infrastructure. Together, these components position NEAR as a coordination layer that seamlessly abstracts away underlying chains and supports the next generation of AI-powered agents.
Like many altcoins, NEAR too has faced significant market pressure this year. Its price has fallen 63.2% year-to-date, currently trading at $1.81. On-chain activity has also softened in 2025: total transactions have declined 12.0% to 1.90B, while fees generated on the network have dropped 56.6% to $2.94M compared with 2024.
Despite the steep decline in token price, NEAR has continued to advance its core infrastructure and performance capabilities. The network recently reduced block times to 600ms, with finality achieved in just 1.2 seconds. Enabled by the “optimistic block” upgrade introduced in Nightshade 2.0, this enhancement allows shards to begin processing transactions without waiting for full block propagation - effectively cutting latency in half. In parallel, NEAR expanded from six to nine shards in 2025, boosting overall network throughput by roughly 33%.
NEAR has also refined its tokenomics model. On October 30, 2025, the network reduced its annual token inflation rate from 5% to 2.5%, resulting in approximately 60M new tokens entering circulation each year. Correspondingly, staking rewards for validators securing the network were adjusted from 9% to 4.75%, based on the assumption that half of the total token supply remains staked.
At the same time, NEAR has continued to broaden its ecosystem through growing collaborations with Privy, Everclear, KyberSwap, Infinex, Zcash, CowSwap and others - partnerships that reinforce its long-term vision of a chain-abstracted, AI-enabled blockchain network.
Chain abstraction refers to simplifying interactions across multiple blockchain networks by hiding underlying technical complexity from both users and developers. As cross-chain interoperability has grown into one of crypto’s biggest challenges, NEAR has introduced an elegant solution. Just as the invention of money abstracted away the limitations of barter, chain abstraction removes the friction of navigating a multi-chain world.
With NEAR Intents and chain signatures, anyone can seamlessly interact with any supported blockchain from any other supported chain. For example, NEAR Intents makes it possible for a user to pay with shielded ZCash while a merchant receives stablecoins on Solana - fast, inexpensive, and without either party having to understand the technical steps happening behind the scenes. Chain signatures extend this capability by allowing NEAR accounts, including smart contracts, to sign and execute transactions across numerous blockchain protocols using derivation paths, multi-chain smart contracts, and a secure multi-party computation service.
NEAR Intents is already leading the industry-wide shift toward chain abstraction. The framework has been adopted by dozens of protocols and applications - including Zashi Wallet and Raydium - and is facilitating real, meaningful usage. To date, NEAR Intents has powered more than 10M swaps, generated over $10M in fees, and enabled more than $6.5B in transfers. In short, NEAR has delivered chain abstraction not as a theory, but as a production-ready, widely-used reality. Since the start of the year, Near has integrated with 15 more blockchain networks, bringing the total number of chains integrated with Near Intents to 24.
We expect continued expansion of NEAR Intents adoption in 2026, with more blockchains integrating NEAR’s chain-signature infrastructure and total transfer volume increasing at an exponential pace as cross-chain abstraction gains traction.
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NEAR’s origins are deeply rooted in artificial intelligence. Before it ever touched blockchains, the project began as NEAR.AI, an AI startup founded by Alexander Skidanov. Its evolution into a blockchain platform was shaped by the belief that AI would ultimately require an open, scalable, user-sovereign infrastructure. NEAR’s trajectory is further defined by its cofounder Illia Polosukhin, who co-authored Attention Is All You Need, the foundational paper that sparked the Large Language Model revolution.
As the world moves toward an AI agentic economy, individuals may rely on many specialized autonomous agents to perform tasks on their behalf-managing assets, executing workflows, processing information, or interacting across chains. Supporting this future requires a blockchain capable of scaling elastically while remaining secure and decentralized. NEAR’s sharding architecture delivers this foundation. By splitting network state into parallel shards, NEAR achieves high throughput and low-cost computation, similar to how large tech companies like Google and Amazon use sharding for global-scale systems. Each account lives on a specific shard, allowing NEAR to increase capacity as demand grows and support AI-level transaction volumes. On December 8th, NEAR announced that the blockchain has achieved 1M transactions per second (TPS) in a publicly verifiable benchmark.
On this base layer, NEAR is building a comprehensive stack for AI-native applications. Foundation-led initiatives such as Shade Agents enable developers to build decentralized, trustless AI agents that can operate accounts and assets across multiple blockchains. Paired with the MCP Server -an open-source toolkit with more than 20 integration modules-AI agents can sign transactions, manage keys, execute swaps, and interact with contracts in a standardized, secure way.
Currently there are over 50 teams actively building AI-driven applications, research projects, and tooling on Near, laying the groundwork for being a leader in the decentralized AI space.These include emerging AI marketplaces and services - Bitte, Public AI, Fraction, IQ, Intellex, and more-forming the early architecture of an agent-driven ecosystem.
In December, NEAR introduced two new AI-focused products - NEAR AI Cloud and Private Chat - further strengthening its position as an AI-native blockchain ecosystem. NEAR AI Cloud enables users to run AI models with full privacy, offering verifiable private inference through hardware-enforced security. By leveraging Trusted Execution Environments (TEEs) alongside on-chain verification, it ensures that computations remain confidential, tamper-proof, and entirely under the user’s control - all while providing access to leading AI models without compromising sensitive data.
Private Chat, a ChatGPT-like LLM assistant built on this infrastructure, extends these guarantees to everyday interactions. Conversations are processed privately within NEAR AI Cloud, ensuring that user data remains secure and inaccessible to third parties.
With scalable infrastructure, agent frameworks, and developer tooling converging, AI is positioned to become one of NEAR’s most important narratives over the next year. The network is no longer just AI-friendly - it is architected for AI-native applications that demand autonomy, privacy, and massive throughput.
We expect the Near to establish real product-market fit in Crypto x AI with 2 or more AI-native applications reaching meaningful usage and AI-driven workloads making up more than 5% of NEAR’s total transactions.
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Despite the decline in the dollar value of assets across the NEAR ecosystem - from $246M to roughly $169M - the network’s underlying capacity to support applications and protocols that achieve genuine product-market fit remains intact. This durability is rooted in NEAR’s long-term strategy of building a developer-centric, intent-driven infrastructure stack, enabling applications to tap into chain abstraction, seamless cross-chain execution, and highly efficient runtime environments.
The benefits of this architecture are now materializing. In November, NEAR App Fees reached an all-time high, signaling a decisive shift from foundational infrastructure development to sustained real-world usage. Both DeFi protocols and consumer applications are increasingly leveraging NEAR’s unique capabilities, reinforcing its position as an ecosystem designed not just to scale - but to empower applications that can scale with it.
At the center of the ecosystem’s acceleration is Rhea Finance, the unified protocol formed from the merger of Ref Finance and Burrow Finance. Now commanding 51% of NEAR’s ecosystem TVL, Rhea embodies the network-level advantages enabled by NEAR’s infrastructure. By integrating NEAR Intents, Rhea offers frictionless liquidity aggregation and cross-chain execution - a capability amplified by the recent privacy tailwinds created through CrossPay swaps with Zcash, which allow users to transact across chains with increased confidentiality. This positions Rhea not merely as a DeFi hub, but as NEAR’s most comprehensive liquidity and execution center, bridging Bitcoin, NEAR, and EVM ecosystems into a unified environment.
Liquid staking remains a second anchor of NEAR’s DeFi landscape. Meta Pool (65M NEAR), LiNEAR Protocol (53M NEAR), and TruFin Protocol (16M NEAR) continue to attract meaningful inflows, benefiting from NEAR’s low-latency execution and predictable transaction costs. These protocols integrate seamlessly with the broader ecosystem, reinforcing yield-generating strategies and supplying high-quality collateral to Rhea and other DeFi primitives. Meanwhile, early interest in tokenized real-world assets is emerging through KAIO, now holding 13M NEAR in TVL.
Wallets are also benefiting from NEAR’s architectural advantages. Hot Wallet and Sweat Wallet, both of which rely on MPC-based flows, have incorporated Chain Signatures and NEAR Intents to streamline cross-chain and cross-application activity. Hot Protocol, the MPC network underpinning Hot Wallet, enables smart contracts to securely create and manage private keys, aligning security with ease of use. Sweat Wallet, backed by Sweat Economy, continues expanding a movement-driven token ecosystem, powered by NEAR’s ability to handle large-scale interactions without compromising user experience.
Templar Finance further highlights NEAR’s architectural advantage with its Cypher Lending, a product designed to natively extend credit across chains. Cypher lending enables users to borrow stablecoins such as USDC or USDT against native assets from other ecosystems - including BTC, ZEC, Solana, and Stellar - without bridges, wrapped assets, custodians, KYC, or intermediaries. Rather than importing risk through wrapped collateral, assets remain on their origin chains while credit is issued through NEAR. This is made possible by NEAR’s Chain Signatures and MPC, which enable secure, intent-driven cross-chain execution while preserving user sovereignty and privacy.
Taken together, these trends reinforce a clear structural trajectory: NEAR has built a foundational infrastructure stack that applications can exploit for scalability, privacy-enhanced cross-chain execution, and frictionless user experiences. As more protocols integrate NEAR Intents and benefit from privacy-forward flows like CrossPay + Zcash, we expect application-layer TVL on NEAR to expand meaningfully.
We expect NEAR’s ecosystem TVL to expand from 160M NEAR to over 200M NEAR in 2026, mirroring the growth pace achieved in 2025 and supported by deeper DeFi engagement and stablecoin adoption.
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