After many years of futile meming, the revenue meta has broken out. We can thank Hyperliquid for this. In 2021, a few DeFi enjoyoooors tried to meme the “real revenue” meta into existence, but outside a handful of projects, onchain activity and revenue were insufficient for this new meta to be sustainable. Then, the bear hit in 2022. The other reason the revenue meta never caught on was that projects that did have meaningful revenue either didn't have a token or their token was treated as an afterthought. Even when a project did have revenue and a token, revenues were rarely meaningful when compared to the FDV of their tokens.

Despite these headwinds, it was obvious revenue would eventually be the dominant narrative. We need only look at Binance, which has been burning BNB (where this BNB came from may be up for debate) for years. BNB is, without a doubt, one of the best-performing assets in history.

1. Have revenue

2. Have a token

3. Buy back the token with revenue

4. Make sure the revenue is meaningful relative to the token market cap

5. Profit

Easy, if you can get past step one 😂.

Tradfi has a metric for this (though like everything, it can be and is gamed): P/E, price to earnings. The theory is that if the price is high relative to earnings, it is bad, and if the price is low relative to earnings, it is good. But fuck tradfi, we can just reinvent the wheel.

In 2023, the Solana ecosystem birthed some of the first hyper-revenue projects. Though, as a recovering eth maxi, I must point out that Uniswap, Aave, and Opensea (all Ethereum projects) were the first to generate meaningful revenue during the previous cycle.

In the bear market, most of Solana's revenues were from memecoins, either launchpads or terminals. The issue was that, in almost every case, these projects didn't yet have a token. Then Hyperliquid combined revenue and a token with a little L1 spice and exploded. Suddenly, what had been obvious to everyone holding BNB for almost a decade was once again obvious to everyone in crypto, especially those early to HYPE (not me, sadly, due to contractual obligations 😅).

If you have enough revenue to buy back enough tokens, you can meaningfully return value to token holders.

A little aside: Back in 2018, Synthetix needed to decide how to distribute value to token holders. We chose distributions vs. buybacks. The reasoning kind of makes sense if you squint, but in hindsight, we optimised for the wrong thing. We wanted everyone staking, so we did not want to reward non-stakers. This worked for a while, especially with high inflation, but unfortunately, the revenue never became sufficient to offset inflation.

So, the revenue wars are in full swing, and the leaders are HYPE, PUMP, ENA, and Axiom. We should also recognise Phantom and Metamask, but let’s leave them for now. While each of these projects has done extremely well this cycle, there are meaningful differences.

Hyperliquid generates the majority of its revenue from exchange fees on its native DEX. While it aspires to be an ecosystem and has made meaningful progress this year with HyperEVM and Builder codes, it is still, from a revenue perspective, a full-stack exchange.

Pump is a protocol/app on Solana, and while they are expanding vertically down the stack by adding their own AMM to Solana, they have not yet decided to launch an L1. Given how the market prices layer ones, it seems almost inevitable.

Ethena is a protocol more than an app, and its strategy has been to focus on distribution via other platforms. This strategy appears to be working fairly well for it so far 😅. Ethena has even satisfied the conditions required to enable their fee switch, something which seemed way off only a year ago.

Finally, Axiom is a pure app that provides access protocols and chains, mainly on Solana, though it has also integrated Hyperliquid. Ninety-nine per cent of its revenue comes from the memecoin trenches.

This is where it gets interesting because all of those projects above occupy different places in the product stack. So we must now return to the fat protocol thesis. Where does the value capture happen in the stack? Historically, the fat protocol thesis was supported by protocols like Aave and Uniswap. But it has been increasingly clear that these protocols are feeling compelled to move vertically up the stack. While every DeFi protocol initially had a dApp, over time, many have launched their own mobile apps and wallets. Where is this pressure coming from? Distribution.

Outside of crypto, most value is captured by the layer that owns distribution. And we are already seeing this play out as crypto evolves. In DeFi summer Curve.fi LPs and token holders captured almost 100% of the value the protocol created, with some minor value capture happening at the aggregation layer, with 1inch and others adding fees or capturing “positive slippage”. But that has shifted massively with Metamask and Phantom enabling in-app swaps. Today, Metamask charges 1% vs the 1-5bps on a curve swap. So Metamask is capturing 20-100x more value than liquidity providers and orders of magnitude more than the protocol itself. Over the long term, distribution wins.

Centralised exchanges are the original superapps. They have custody, spot, perps, staking, launchpads, and many more services all in a single platform. They are also fully vertically integrated and arguably manage to capture far more value through trading fees and launchpads than most of the tokens they list ever generate at the protocol level. But the world is changing, and CEXs are being forced to change. In the next five years, we will move beyond this prehistoric era where the majority of value transfer in crypto happens off-chain.

Infinex was built to replicate all of the functionality of a CEX by leveraging onchain protocols. Last month, we went live with perps powered by Hyperliquid for all users, and eventually, spot will be added, two critical features that must be present to challenge CEX dominance. We already have one of the best token swapping platforms in crypto. We will extend this further with the launch of a trading terminal in the next few months. We are also launching our own extension, which will have built-in swaps and other features that leverage the Infinex platform to make it the best experience for interacting with dapps on any chain.

From there, we will continue to roll out new features on new chains, including NFTs, new games, an upgraded yield interface, and prediction markets.

It has been a while since Infinex launched an incentive campaign. We had Yaprun, but that was an attention campaign. We are now ready to unleash powerful incentives for new and existing users to try the platform. So we are bringing back Crates. Craterun was one of the best and most beloved incentive campaigns of this cycle, iykyk. Crates will be 100x more fun and exciting than the OG version. Crates will become the unified incentive delivery mechanism to support all new apps and features on Infinex.

Each new feature will have a chance to design a crates-based campaign that aligns with the app's user base and usage patterns. So, the Crates campaign for the new Infienx extension will look very different from the one for Infinex Terminal, but they will all leverage Infinex Crates as the single memetic reward scheme.

The final component of the superapp thesis is that it is not enough to have one undiversified revenue stream. If we are going to supplant CEXs, we must have multiple independent revenue streams that can all be directed towards token buybacks. But, Infinex doesn't have a token! Well, yes and no, Infinex has the patron NFT, but as everyone has realised, an NFT is not the optimal structure for a token to support a platform like Infinex. We need a real token. But only once we have earned it. And here is the final point: we will transition to a new token once we have truly validated the superapp thesis by demonstrating sustained and diversified revenue from multiple platform features.

We also need to enshrine this in a governance framework. The specifics of what metrics will be required to launch the token will be included in the new governance proposal, a complete refresh of Infinex governance. This will ensure clarity over key decision-making processes and codify token buybacks within governance. I will publish a post on governance in the next few weeks.

Infinex will rapidly deliver new features over the next few months. This, combined with well-designed incentive schemes that amplify the network effects of our superapp, will allow us to rapidly expand distribution. Increased distribution will grow revenue, which will be directed towards buybacks once we have satisfied the requirements for launching an Infinex token. It’s a simple plan, really. Look out for more details in upcoming posts on the relaunch of governance, crates and our upcoming TGE.