Onchain fee revenue — the gross amount users pay to transact on or use decentralized protocols — declined sharply in the second quarter, falling 33% compared to the same period in 2024, according to a new analysis by 1kx Network. Despite the drop, payouts to token holders remained largely unchanged — a finding that underscores the growing influence of targeted tokenomics policies within decentralized finance.

Revenue Declines Across Key Sectors

The 1kx Network analysis reveals that the downturn was not uniform across all sectors. Fee revenue generated by decentralized exchanges (DEXs) dropped by $625 million, representing a 57% year-over-year decrease. The largest contributors to this decline were Meteora (MET), Raydium (RAY), and PancakeSwap (CAKE).

Token launchpads experienced a similar 57% drop in fee revenue, with Pump.fun (PUMP) accounting for roughly half of that total decline.

Bright Spots: Perpetual Futures and Prediction Markets

Not all segments contracted. Perpetual futures and prediction markets posted higher fee revenue during the same period, with growth driven by platforms such as EdgeX (EDGE) and Hyperliquid (HYPE). Notably, the prediction market platform Polymarket alone generated approximately $100 million in fees in the second quarter, highlighting a shift in user activity toward event-based trading — a category that has gained broader mainstream attention alongside high-profile elections and sporting events.

Why Token Holder Payouts Remained Stable

The most striking finding of the 1kx Network report is the resilience of token holder fee income. Despite lower overall network fees, payouts to token holders saw little change.

The analysis attributes this stability primarily to Hyperliquid's token buyback and burn policy, which effectively reduced the circulating supply of tokens — thereby maintaining or increasing the value of payouts to holders even as gross fee revenue fell. This approach mirrors mechanisms adopted by major centralized exchanges and other protocols that use supply reduction to support token economics independently of top-line revenue.

Implications for Investors and Protocols

This divergence between onchain fee revenue and token holder income carries significant implications. For investors, it suggests that a token's value is not solely tied to the platform's gross revenue but is heavily influenced by the specific tokenomics model in place. For protocols, the data reinforces the importance of designing sustainable fee distribution and buyback mechanisms capable of weathering market downturns.

The second-quarter data from 1kx Network paints a nuanced picture of the DeFi landscape. While overall onchain fee revenue remains under pressure, strategic tokenomics — particularly buyback and burn policies — can provide a buffer for token holders. As the market matures, the design of these mechanisms will likely become a key differentiator for platforms seeking to attract and retain long-term capital.

This article first appeared on BitcoinWorld.