This edition of the newsletter explains Real Economic Value (REV) as a blockchain metric that measures the total fees and tips users pay for transactions, providing a more direct indicator of economic demand and activity than metrics like TVL or user counts. While REV effectively captures economic engagement and is driven by factors like asset volatility and MEV activity, it has limitations including difficulty in cross-chain comparisons, susceptibility to speculative spikes, and inability to capture off-chain value, requiring contextual analysis alongside other metrics for meaningful insights. We'll also share some interesting articles, portfolio updates and market highlights.
a) How AI Is Reinventing Wealth Advisory
• This article analyzes how AI is transforming the financial advisory industry through a case study of Continuum, a startup that automates administrative tasks for financial advisors who currently spend 86% of their time on non-advisory work.
• The piece argues that AI automation can democratize wealth management by making it economically viable for firms to serve clients with lower net worth (potentially dropping the threshold from $1M+ to $100K), while allowing advisors to focus on high-value strategic work rather than mundane paperwork and meeting documentation.
Case Study: Continuum Embodies AI's Revolution in Knowledge Work
b) Different Types of Stablecoins and Their Depeg Risks
• This comprehensive report by Cork Research analyzes different types of stablecoins (fiat-backed, crypto-collateralized, and algorithmic) and their historical depeg events, finding that fiat-backed stablecoins like USDC and USDT typically recover quickly from temporary depegs, while algorithmic stablecoins like TerraUSD have proven most vulnerable to catastrophic permanent failures.
• The analysis identifies key risk factors including regulatory actions, liquidity issues, collateral quality, and market confidence, concluding that stablecoins with transparent reserves, clear redemption mechanisms, and strong adoption tend to be most resilient to depeg events.
https://www.cork.tech/blog/different-stablecoin-risk
c) The Future of Scalability: A Comprehensive Landscape of Web3 Parallel Computing
• This comprehensive report analyzes the blockchain scalability landscape, focusing on parallel computing solutions that address the blockchain trilemma of security, decentralization, and scalability.
• The document categorizes solutions into EVM-compatible parallel chains (like Monad and MegaETH), natively parallel architectures (Solana, Sui, Aptos), and Actor Model systems (AO, ICP), each offering different approaches to achieving high-throughput transaction processing through various forms of parallelism—from account-level to instruction-level execution optimization.
By: 0xjacobzhao & ChatGPT-4o | https://linktr.ee/0xjacobzhao
a) Pendle: The Era of Stablecoin Expansion
• This investment research report analyzes Pendle, a DeFi protocol that enables trading of tokenized yield from various assets, particularly focusing on its dominance in the rapidly growing yield-bearing stablecoin market which has expanded from $1.5B to $11B in 18 months.
• The authors project that as stablecoin issuance could double to $500B with yield-bearing stablecoins capturing 15% market share ($75B), Pendle could scale to $20B TVL and earn $200M in protocol fees, potentially reaching a $6B protocol valuation at 30x revenue multiple.
Publish Date: May 21, 2025 Authors: James Ho (Modular Capital), Jose Sanchez (Spartan Group) Executive Summary Stablecoins are one of the largest and fastest growing segments in the crypto economy. Tether (USDT) crossed $150B+ of issuance, Circle (USDC) reached $60B+. Acces
b) Sonic Labs and GSR Partner to Scale Liquidity, Strategy, and Ecosystem Growth
• Sonic Labs has partnered with GSR, a leading crypto capital markets firm licensed by MAS and FCA, to provide deep liquidity, strategic guidance, and full-stack support for the S token and broader DeFi ecosystem.
• The partnership extends beyond traditional market making to include liquidity deployment across Sonic's DeFi ecosystem, support for early-stage projects, and strategic guidance for new teams, with GSR also sponsoring Sonic Summit 2025 in Vienna.
Sonic Labs names GSR as one of the official market makers for the S token, boosting liquidity and backing DeFi growth across the Sonic ecosystem.
What is REV?
Simply put, If TVL tells you what sits in the vault, REV tells you how often the vault door is opened and why. In this article, we will be giving you an overview of what REV is and its utility as a metric for blockchain activity.
REV is the sum of all in-protocol transaction fees and out-of-protocol tips users pay to have their transactions included on a blockchain. It’s a direct measure of the economic demand for interactions with a network, effectively measuring economic activity on a blockchain.
Other metrics such as Total Value Locked (TVL) or Monthly Active Users (MAU) provide useful snapshots but don’t tell the full story. TVL measures the value of assets locked in a blockchain’s protocols. However, it doesn’t show how actively those assets are being used or represent demand for blockchain activity. Similarly, MAU counts how many users a blockchain has but doesn’t reveal the economic weight of their actions. Some users might hold several millions worth of assets in dApps without ever transacting, inflating TVL but contributing little to actual activity. REV, by contrast, focuses on the real costs users incur, making it a more direct indicator of a blockchain’s economic health.
What goes into calculating REV?
REV consists of two main components.
Firstly, in-protocol transaction fees. These are the base fees and priority fees users pay to have their transactions processed by validators or miners.
Secondly, out-of-protocol tips refer to additional payments users make to prioritise their transactions, often in the form of bribes to miners/validators e.g. Miner Extractable Value (MEV). These tips are common in competitive environments where users want their transactions processed faster, such as during a memecoin presale or during Token Generation Events (TGE) and airdrop claims.
Drivers of REV
One primary driver of REV is the volatility of assets hosted on the chain. High-volatility assets, like Solana’s memecoins, ignite speculative trading, which ramps up transaction volumes and creates lucrative Miner Extractable Value (MEV) opportunities. During periods of intense market speculation, users compete fiercely to prioritise their transactions, often paying substantial tips to fill their orders. This competitive bidding spikes REV, as seen in Solana’s 2024 memecoin craze.
Another critical factor is the maturity of a blockchain’s MEV infrastructure. In chains with nascent MEV systems, such as Solana in 2024, users often resort to aggressive bidding to influence transaction ordering, resulting in elevated tips. Solana’s remarkable 40x gap between median and average fees during this period underscores the impact of immature MEV systems on REV. As MEV infrastructure evolves, these spikes may stabilise, but in their early stages, they act as a powerful catalyst for inflating economic value.
Finally, each blockchain’s unique use cases shape its REV profile. Solana’s REV in 2024 was driven by memecoin launchpads like pump.fun, which attracted retail speculators and fuelled transaction volumes. Ethereum, by contrast, owes its steady REV to its dominance in Decentralised Finance (DeFi), with protocols facilitating lending, borrowing, and trading. These chain-specific adoption drivers explain why REV varies so widely across ecosystems.
Limitations of REV as a Metric
One significant limitation lies in the fee structures across blockchains, which complicates direct comparisons. This structural diversity means REV cannot serve as a linear benchmark across chains, as the underlying economic mechanics differ profoundly.
Another challenge is the skew introduced by MEV activity. High MEV environments, such as Solana during its 2024 memecoin frenzy, drive significant fee spikes as users pay hefty tips to prioritise transactions. While this boosts REV, it often reflects speculative gambling on volatile assets rather than sustainable economic value. Such disproportionate fees can distort perceptions of a chain’s health, masking whether its activity stems from genuine utility or fleeting hype.
REV also functions as a lagging indicator, offering a snapshot of current activity but little insight into future potential. A chain’s REV can plummet rapidly, as seen with Solana’s 85% drop from its 2024 peak, driven by a cooling of memecoin speculation.
Moreover, REV captures only a fraction of a blockchain’s value. REV misses off-chain value, such as revenue generated by application-layer dApps or ecosystem partnerships, which are vital to a chain’s economic ecosystem,
Finally, Bitcoin serves as a stark reminder that low REV does not equate to worthlessness. With a Fully Diluted Valuation (FDV) of approximately US$2.1 trillion as of May 2025, Bitcoin generates roughly US$206 million in annualised REV, more than a 10000x FDV/REV multiple. Its role as a store-of-value transcends transactional activity, illustrating that a chain’s value can far exceed its REV.
Concluding thoughts
REV’s strength lies in its ability to highlight economic engagement, but as a standalone metric, it falls short of painting a complete picture. Its fluctuations, driven by transient factors like memecoin frenzies or MEV spikes, can obscure a chain’s underlying fundamentals. To derive meaningful insights, REV must be used in confluence with other indicators. Only then can we discern if a chain’s economic activity is robust or merely a fleeting bubble. Maximising REV is not a universal goal, as its relevance varies with a chain’s core use case. Each chain’s purpose, whether store-of-value, DeFi hub, or “on-chain casino”, dictates whether REV is a representative metric or not
The future of REV lies in cultivating healthy, sustainable economic activity, even if it means sacrificing absolute fee income. Chains must prioritise long-term stability over short-term revenue spikes. By aligning fee structures with their unique adoption drivers, chains can build resilient economies that endure market cycles. As the crypto landscape evolves, REV will remain a vital tool for measuring economic demand, but its true power lies in contextual application. The goal is not to crown a chain with the highest REV but to foster ecosystems where user value and economic health coexist.
*Disclosure: The information provided on this newsletter is for general informational purposes only and does not constitute professional nor investment advice.
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