Author: Tiger Research Reports

Translated by: Deep Tide TechFlow

Deep Tide Overview: GameFi attracted $2.5 billion in just two months, but the number of players then plummeted by 99.7%; in 2025, a new narrative emerged every month, and all ultimately crashed. In the first half of 2026, “old things” like stablecoins, DeFi, and RWA instead survived—because they finally began to address real needs rather than crafting stories to attract money. This report explains why the cryptocurrency market is shifting from narrative-driven to product-driven, and which sectors have truly found product-market fit.

In the first half of 2026, no single narrative was able to drive the entire market. Nevertheless, stablecoins, RWA, meme tokens, DeFi, and prediction markets all survived during the market downturn and even achieved growth. This report suggests that the cryptocurrency market in 2026 is no longer driven by a single narrative, but seeks product-market fit across multiple segments.

Key Points

• A single narrative once could drive the entire market; now the market moves according to real needs.
• Even in a down market, established areas like stablecoins, DeFi, RWA, and meme tokens continue to survive.
• Ultimately, only those projects that find product-market fit and generate real revenue from genuine users can survive.

1. The Past Narrative-Driven Cryptocurrency Market

Narratives have been the core driving force behind attracting participant attention and liquidity in the cryptocurrency market. Fields driving major market cycles, such as DeFi Summer, were imbued with unique narratives, creating a cyclical pattern in the market where liquidity shifts to the next narrative once the previous one fades.

From a macro perspective, the cryptocurrency market has experienced four major cycles, each dominated by a single narrative:

2020: DeFi

2021: NFT/P2E/GameFi

2022: L1/L2 Competition

2024: Restaking

In the narrative-driven growth story, GameFi generated the most extreme results.

Major traditional game publishers like Square Enix and Ubisoft entered the field, attracting $2.5 billion in inflows in just the first quarter of 2022. However, areas that could not demonstrate real product-market fit could not last. The flagship game of the sector, Axie Infinity, saw an average monthly active user count plummet by 99.7%, from a peak of 2.8 million in January 2022 down to approximately 8,000 by May 2026. This clearly illustrates how quickly a narrative predominantly based on reasoning and capital can collapse.

2. The Narratives Consumed Last Year

As noted in our previous report, 2025 marked the peak of this narrative consumption pattern. Following the AI agent narrative, a new narrative emerged almost every month, with the rotation speed constantly accelerating.

On the surface, this seems very wasteful, but it is hard to deny that this rapid narrative turnover is key to maintaining retail investor attention, thereby becoming a core driving force in today's market. Even so, the market's potential demand for these past narratives is aimed at the tokens themselves and not the problems the products aim to solve.

3. Supply Innovations Without Demand

An example illustrates how most past narratives have developed.

A decentralized social media project emerged, addressing the issue of income monopolized by existing platforms while offering inadequate compensation to creators. It proposed a vision of reducing fees and returning content ownership and income to creators.

Token Rewards: Early participants received token rewards, and as the story spread that people could earn money merely by being active on the platform, market interest grew.

User Inflow and Expansion: Similar projects followed, launching tokens around a minimum viable product, attracting users through airdrops and liquidity incentives, leading to rapid expansion in the ecosystem's market cap and trading volume.

Product Development Stalled: The token price and reward scale began to outpace the product itself. Once fundraising and initial distribution were completed, development and user growth stagnated, leaving the original issue of creator compensation unresolved.

Liquidity Exit: There was never a sufficiently large user base that strongly felt this issue, and the inflow of capital chased price appreciation rather than the product itself. Thus, once the narrative peaked, liquidity and users quickly left as well.

This pattern repeated across several narratives, with the market eventually realizing that supply innovations without potential demand are of little significance. The market began to affirm that only projects generating real revenue and maintaining stable user bases are important; only projects demonstrating actual product-market fit can survive.

4. 2026: The PMF Era That Creates Demand

Past narratives built and provided solutions without potential demand and tried to manufacture demand afterward, whereas the PMF era operates oppositely: products are built to match the existing demands of customers. The market is shifting towards real products, with user count and revenue growing alongside the products and brands, rather than only the token's market value rising.

The five areas covered here were selected based on three criteria: usage metrics for the first half of 2026, such as trading volume and revenue, the trajectory of new players entering the field, and market cap growth. These criteria are significant because they are difficult to artificially manufacture simultaneously in a short time.

The following sections trace the initial problems each field aimed to solve and the directions in which its leading players are now expanding.

4.1. Stablecoins: From Non-Volatile Payment Tools to Cross-Border Settlement Infrastructure

Stablecoins are tokens pegged to the value of fiat currency, used as a means of payment and settlement. This category has a market cap of $304.2 billion, close to its historical high of $321 billion.

Tether (USDT): Market cap of $184.08 billion, monthly settlement volume of $1.79 trillion (month-on-month growth of 63%), total settlements over the past 12 months reaching $10.2 trillion, with net income exceeding $10 billion in 2025 and holding $141 billion in government bonds.

Circle (USDC): Market cap of $73.25 billion, the default stablecoin for major exchanges and institutional settlement channels such as Coinbase.

Stablecoins initially served as a way to trade cryptocurrencies without exposure to volatility. Their role has expanded to cross-border remittances and on-chain payment infrastructure.

Growth is now showing more diverse forms. In June 2026, over 140 traditional companies, including Visa, Mastercard, Stripe, Coinbase, and BlackRock, announced the establishment of the OUSD (Open USD, from Open Standard) alliance. Non-USD stablecoins pegged to currencies like the Korean won, Japanese yen, and euro are also becoming more common. Their total market cap remains small, at only $1.2 billion, but the number of wallets holding them has grown 30 times, from 40,000 in January 2023 to 1.2 million in March 2026.

Stablecoins are no longer just fixed-value payment tools; they are evolving into settlement infrastructure that operates independently of borders and time zones.

4.2. DeFi: Built to Replace Banks, Now Becoming Part of Financial Infrastructure

DeFi refers to finance based on smart contracts, enabling lending, trading, and derivatives without centralized intermediaries.

Aave: Market cap of $1.397 billion, TVL of $14.53 billion, annual revenue of $119 million, leading DeFi lending protocol.

Morpho: Market cap of $1.302 billion, TVL of $7.497 billion, annual revenue of $0 (with all its annual fees of $222 million going to lenders), briefly surpassed Aave in market cap from the end of May to June, but Aave regained the lead in July.

Uniswap: Market cap of $2.287 billion, TVL of $3.14 billion, annual revenue of $850 million, leading decentralized exchange, with a 24-hour trading volume of $2.66 billion.

Hyperliquid: Market cap of $13.47 billion, TVL of $6.07 billion, annual revenue of $874 million, accounting for about 76% of the perpetual contract DEX category's market cap and about 20% of DeFi overall, with on-chain perpetual contracts market share as high as 70%.

DeFi started in 2020, based on the premise of decentralization, returning the profits earned by intermediaries like banks directly to users.

Today, its sustainability is not based on that ideology but rather on the demands of institutions for on-chain financial infrastructure. Morpho and Aave provide treasury risk management and lending infrastructure that institutions want, Uniswap facilitates trading of assets that institutions wish to transact, and Hyperliquid supports traditional asset trading, not just cryptocurrencies.

Each is evolving in directions somewhat different from their founding ideologies, but it is this decisive turn toward addressing real needs that has enabled these protocols to survive and grow.

4.3. RWA: From Democratizing Traditional Assets to Efficiency

RWA refers to the tokenization and on-chain distribution of traditional real-world assets, such as government bonds and private credit. This category has a market cap of $65.2 billion, with tokenized government bonds being the largest subcategory at $13.4 billion.

Ondo Finance: TVL of $3.52 billion, ONDO market cap of $1.75 billion, leading provider of tokenized government bond infrastructure.

BlackRock BUIDL: AUM of $2.4 billion, due to its net asset-linked fund token, does not have a traditional sense of market cap, making it the largest single tokenized government bond fund.

Maple Finance: SYRUP market cap of $218 million, private credit AUM of $4 billion, surpassing BlackRock BUIDL.

RWA is working to bring traditional asset management on-chain to enhance settlement speed and accessibility. Its initial customer base was not institutions. The field started with synthetic asset exchanges that leveraged the fact that on-chain markets operate outside existing regulation to lower the barriers to trading real-world assets. However, today, institutions constitute the largest user base in this field.

Tokenized stocks are a notable development to watch. Adoption by traditional institutions like Securitize and DTCC is increasing. In July 2026, DTCC began real-time trading of tokenized securities with over 50 institutions, and Securitize listed its own stock SECZ on the New York Stock Exchange while issuing tokenized stocks across multiple chains, including Avalanche and Solana. Centralized exchanges like Binance (bStocks) and Kraken (xStocks) are also expanding their tokenized stock products in multiple countries. By mid-July 2026, the market cap of the tokenized stocks category reached $2.3 billion, nearly doubling since first breaking $1 billion in March.

Trading volume of these assets on decentralized exchanges remains relatively small compared to DeFi, and most collateral use still relies on permissioned and whitelisted structures. Deeper on-chain integration comparable to DeFi's Lego-like composability may take more time. Currently, the industry is still in the stage of proving the practicality of on-chain asset management.

4.4. Prediction Markets: From Simple Betting to Market-Dominating Trends

Prediction markets are on-chain contract markets where participants bet on the outcomes of real-world events. This category has a market cap of $9.58 billion and is the latest formed among the five areas covered here.

It is also noteworthy that the two platforms actually dominating the industry, Kalshi and Polymarket, have yet to issue tokens.

Kalshi: Cumulative funding of $2 billion, valuation of $22 billion, which is 11 times its funding amount. Its June trading volume was $31.5 billion (month-on-month growth of 87.4%), surpassing that valuation.

Polymarket: Cumulative funding of about $1.6 billion, valuation of $9 billion. In June, its main platform outside the U.S. saw trading volume reach $10.26 billion (month-on-month growth of 45%), with annualized revenue exceeding $1 billion since it was allowed to operate in the U.S.

The World Cup has been both an opportunity and a challenge for prediction market platforms. It drove a sharp increase in trading volume in June, but following the finals on July 19, the total open contracts on both platforms fell by nearly 20% from a peak of about $2 billion in early July. As sports contracts accounted for around 80% of total trading volume during the tournament, trading volume may remain sluggish before the next major event, the U.S. mid-term elections.

Regulatory risks also remain. On July 21, 2026, a Washington state court issued a preliminary injunction prohibiting Kalshi from selling sports event contracts, claiming it constitutes illegal gambling under state law.

Before 2024, prediction markets did not even exist as a standalone category. Today, they are the fastest-growing subfield in the cryptocurrency market. What is unique about this field is that its growth is evidenced not by token market cap or TVL but by real trading volume and revenue sourced from attracting users from outside the crypto circle into the on-chain ecosystem. This is one of the clearest examples to date of blockchain technology becoming part of everyday use for a broad audience.

4.5. Meme Tokens: From Simple Speculative Assets to Liquidity-Driven Strategies

The last area is meme tokens. Unlike the other areas mentioned above, meme tokens lack explicit utility. Their value arises from community and attention. This category has a market cap of $25.68 billion, greater than that of prediction markets.

Dogecoin ranks first with a market cap of $11.22 billion, followed by Shiba Inu at $2.5 billion. Together, these two tokens account for 53.4% of the entire meme token category's market cap, indicating that once a token occupies a symbolic status in this field, it tends to retain that status, even if loosely.

Here, the emphasis on Pump.fun and CASHCAT is not due to their market cap ranking, but because of their symbolic significance.

Pump.fun: Market cap of $806 million; notably, its public sale in July 2025 raised $600 million in just 12 minutes.

CASHCAT (Robinhood chain): Its market cap increased by over 2100% within a week of launch, peaking over $200 million before dropping about 75% from that peak to $59 million as of July 17.

As seen in the case of Robinhood chain in July 2026, the meme token narrative can still temporarily attract liquidity across an entire chain, a pattern observed in past cycles. The TVL of Robinhood chain expanded sharply, growing from $17 million on July 3 to $312 million by July 13, with daily trading volume on DEX reaching $846.8 million, driven mainly by the meme token $CASHCAT.

The practical value of meme tokens lies in attracting early users and simplifying entry. New chains or applications can quickly build communities using meme tokens and naturally encourage activities like bridging assets or trading on DEX. Some users attracted in this way will go on to use other DeFi services or applications within the ecosystem and remain active, making meme tokens an effective entry point and marketing channel.

Ultimately, the function of meme tokens is more like an initial tool for quickly gathering users and liquidity rather than a long-term holding asset. The key to success lies in whether early interest can be converted into actual product usage and sustained retention within the ecosystem.

5. What It Takes for Projects to Survive

The projects that have survived to date have tapped into genuine needs that allow users to return repeatedly, evidenced by clear performance metrics such as trading volume, TVL, and fee income.

The demand in the market in 2026 is concentrated at two different endpoints of the spectrum. One end is speculative demand seeking high volatility and instant returns. Meme tokens, perpetual contract DEXs, and prediction markets effectively absorbed this demand through rapid trading cycles and high capital turnover. The other end is the real financial demand for the stable custody, transfer, and efficient management of assets. Stablecoins, RWA, and DeFi infrastructure are fulfilling core financial functions such as payments, collateralization, yield generation, and risk management.

When a sustainable revenue structure and network effects are added to this foundation, real product-market fit is established. The price of the token may generate initial interest, but long-term survival is determined by usage frequency, retained capital, income, and operational capability.

The KBW, to be held in late September 2026, will provide a close look at this transition. Tether U.S. CEO Bo Hines, Hyperliquid co-founder Jeff Yan, Robinhood Crypto Senior Vice President Johann Kerbrat, and Christine Moy of Apollo are key figures driving these changes and will share the stage together. Through dialogue with key leaders in the stablecoin, perpetual contract DEX, and asset tokenization and RWA fields, attendees will be able to witness transformations that have thus far only been visible in the data.