In the past few years, the narrative around infrastructure in the crypto industry has been seen as absolutely core. From public chains to Rollups, and then to modular DA solutions, almost every round of funding has concentrated on the imagination of "underlying technology changing the world." However, after Ethereum's 4844 upgrade, which caused L2 costs to plummet and significantly reduced the expansion costs of blob data, various modular DA solutions accelerated their implementation. Block space has transformed from a once-scarce resource into a highly interchangeable low-cost commodity, leading to a systematic shift in the valuation logic of infrastructure.
This change is strikingly similar to the internet infrastructure bubble of the late 1990s. At that time, a global fiber optic network was laid far beyond demand, causing bandwidth prices to plummet by over 90% within a few years, and infrastructure investment suddenly lost its scarcity. The true giants that emerged were application layer companies like Google and Facebook, which capitalized on the spatial advantages after the "cost collapse," rather than the fiber operators that were most sought after by capital at the time.
The crypto industry is replaying the same path. A typical case is EigenLayer. Its TVL surged to $20 billion between 2024 and 2025, becoming the strongest infrastructure project in the re-staking track. However, the performance of its token EIGEN has been weak for a long time after its launch, failing to create a positive feedback loop with the TVL scale. The reason is clear: if protocol revenue cannot consistently return to the token, the market will not continue to pay a premium for the "technology narrative." In other words, the valuation model at the infrastructure stage has reached a bottleneck, and the industry is shifting from expectation-driven to real revenue-driven.
Against the backdrop of declining costs, converging functions, and saturated competition, infrastructure is transitioning from being the "protagonist of the story" to a "pipeline" similar to the internet era. True value is beginning to shift towards applications that can directly face users and form cash flow loops.
As the premium for infrastructure recedes, the application layer is starting to take on the core of industry profits. On-chain revenue data clearly indicates that since 2020, the revenue share of application projects has been continuously rising, approaching 80% by 2025. This revenue does not rely on sentiment, narratives, or governance expectations, but comes from tangible cash flows such as transaction fees, management fees, and stability fees.
The decentralized perpetual trading platform Hyperliquid is the most typical representative of application value. It has consistently contributed millions of dollars in daily transaction fees over the past few months. More importantly, it uses over 90% of its revenue to buy back the token HYPE, directly turning protocol revenue into long-term buying power that supports the secondary market. This "revenue equals value" closed loop has made Hyperliquid one of the most watched applications this year and has set a new benchmark for the business model of decentralized trading products.
The Solana ecosystem's Pump.fun showcases another application path. It enters the market with a meme token creation tool that has an extremely low threshold. Seemingly lightweight, it extracts small fees from each creation and transaction, generating over $300 million in revenue in 2024 and continuing strong growth in 2025. At its peak, its trading volume accounted for nearly 20% of the total DEX traffic on Solana. This case illustrates that in the application era, traffic, distribution, and ease of use are themselves business models.
The stablecoin and yield protocol Ethena standardizes futures hedging strategies and offers them to ordinary users in the form of USDe, an "internet bond." Its TVL once exceeded $15 billion, and protocol revenue stabilized at tens of millions of dollars. Users are willing to pay for stable returns, and the protocol generates sustainable revenue through a clear fee structure, which is then transmitted to the market through a token mechanism. This structurally strong and highly transparent business model is becoming mainstream in the application layer.
These cases point in one direction: the value anchor of the application layer has shifted from "expectation" to "cash flow." The market is rewarding projects that can generate real revenue, build buyback loops, and fully connect product experience with business logic.
As applications begin to become the main line of the industry, a significant trend is emerging: Asian teams are becoming the most competitive group of builders. The Electric Capital developer report shows that the proportion of blockchain developers in Asia has surpassed North America for the first time, making it the largest technology contribution region globally. This change is not accidental but a necessary result of the collective accumulation of the Asian internet industry over the past decade.
Asian teams possess three extremely critical capabilities in the application era: rapid product iteration speed, strong growth and operational systems, and adaptability in cross-cultural and multi-market environments. From TikTok to Temu, and various AI tools, these projects have proven globally that Asian teams are not only good at "copying quickly," but also excel at "deep product refinement, high growth efficiency, and fast commercial model closure."
In the crypto industry, this capability migration is even more evident. Rabby Wallet has captured a significant share from traditional wallets through a safer and more user-friendly signing experience; gmgn.ai has become a go-to on-chain research tool for retail investors and traders; Pendle has built a new interest rate derivatives market through yield splitting. These projects collectively reflect the advantages of Asian teams in understanding user needs, comprehending on-chain behavior, and having higher execution efficiency.
The crypto industry is shifting from being technology-driven to product-driven, with product-driven focusing on iteration speed, user experience, and market sensitivity. This is precisely the main battlefield for Asian teams. Therefore, as the application era fully unfolds, the competitive structure of the entire industry is undergoing profound changes: narratives are no longer determined by Western VCs but are increasingly reshaped by Asian developers, operators, and product teams.
In the application cycle, investors and entrepreneurs need to redefine their layout strategies. The most important thing is not to choose a "technology revolution track," but to select directions that genuinely have demand, can form revenue loops, and can accumulate user relationships over the long term.
Trading, issuance, and stable yield applications remain the most robust core areas. The success of Hyperliquid, Pump.fun, and Ethena has already proven that these scenarios have long-term and stable demand, and their business models are inherently clear. Users will not stop trading, issuing tokens, or seeking stable yields due to changes in narratives, so these tracks possess the strongest ability to traverse cycles.
In uncertain fields, such as prediction markets, on-chain games, or social applications, the optimal strategy is not to bet directly on a specific project but to bet on foundational tools for the track, such as aggregation entrances, data analysis tools, clearing, or risk control components. These tools have a higher survival rate and can gain leveraged returns as the entire track grows.
A deeper layer of opportunity comes from user entry points. In the application era, the value of entry points far exceeds that of the track itself. Wallets, aggregation frontends, cross-chain entrances, payments, and On/Off-Ramp positions are becoming new long-term profit centers. Whoever controls the entry points controls user assets and behavior, and can maintain initiative in future value distribution. The frequent financing and acquisitions in the wallet track over the past year are the best proof of this.
In summary, the crypto industry is undergoing a profound structural shift: the era of infrastructure is nearing its end, the application era is fully opening, and Asian teams are standing at the main melody of the cycle. In the next three to five years, the true core value of the industry will be defined by products that can generate revenue, build closed loops, and meet real user needs, rather than by a faster chain or a larger TVL.
Related: Coinbase announces nine major crypto innovation directions it plans to bet on in 2026
Original article: “The Crypto Industry Enters the Product Era: Asian Developers Are Taking Over the Next Wave of Dominance”
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