Right now, liquidity is hard to come by, but cryptocurrency traders and protocols still need influx and income to keep going.
As the crypto winter drags on, Astute crypto investors have realized that one of the reliable sources of passive income that still exists can be found in protocols that generate income and share part of it with their respective communities.
Platforms that earn real yield through useage fees are the obvious winner in the bear market, That mean perpetuals and options as they are profitable bear or bull. that’s why #GMX is hot, #snx fees up massively and #eth is just a no brainer.
— Collingwood.lens (@Fraxima1ist) July 13, 2022
Platforms that earn real returns through usage fees are the obvious winners in the bear market, i.e. perpetuals and options, as they are profitable in both bear and bull markets. That’s why #GMX is hot, #snx fees massively and #eth is a doddle.
Let’s take a look at some of the protocols that continue to thrive in the current bear market.
The DeFi Sector May Be Dead, But Platforms With Revenue Will Thrive
Data from Token Terminal shows that platforms with positive revenues are primarily non-fungible token (NFT) markets such as LooksRare and OpenSea.
Apart from a few select protocols, such as MetaMask, Decentral Games, Axie Infinity, and Ethereum Name Service, most of the remaining top-earning protocols are decentralized finance platforms, showing that while DeFi is down, it is not out of the game.
Commission sharing helps attract liquidity
DeFi protocols and decentralized applications (DApps) that offer a fee to token holders and liquidity providers also have positive revenue.
Historical view of crypto/web3 projects that generate fee revenue to their token holders.
Protocol revenue market share leaders in ’21:
Q3: Axie Infinity
Q4: Ethereum pic.twitter.com/zNRFnss7c4
—Terminal Token (@terminaltoken) January 29, 2022
Historical overview of cryptocurrency/web3 projects that generate fee income for their token holders.
Protocol Revenue Market Share Leaders in ’21:
Q3: Axie Infinity
As the bear market continues to pummel prices and weed out unprofitable and poorly managed platforms, protocols that offer token holders passive income streams have a better chance of lasting until the next bull market begins.
Synthetix (SNX) makes a comeback
A good example of how fee sharing can help propel a DeFi token and protocol was seen recently with Synthetix (SNX), which made waves when it partnered with Curve Finance to create Curve pools for several of its Synths assets.
Since the cross-chain collaboration was established, protocol revenue for Synthetix has seen a huge increase that coincided with SNX price rising from $1.56 to its current price of $2.59.
The rise in revenue did not go unnoticed by cryptocurrency Twitter, which was quick to point out the platform’s rapid turnaround.
— Wega (@William24931283) July 7, 2022
$SNX @synthetix_io bypassed @AaveAave on daily fees Also, @SushiSwap @CurveFinance @MakerDAO combined.
No one knows how all this will play out for Synthetix in the long run. At the moment, the platform is proving that generating revenue and sharing some of it with token holders is a way to maintain market share during a market downturn.
The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Cointelegraph.com. All investments and operations involve risk, so you must carry out your own research when making a decision.
Investments in crypto assets are not regulated. They may not be suitable for retail investors and the full amount invested may be lost. The services or products offered are not aimed at or accessible to investors in Spain.