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Traders paid $9.7 billion in on-chain fees during the first half of 2025, according to a report by 1kx. That figure represents a 41% increase from the previous year and is the second-highest on-record total for a first-half period. 1kx projects that on-chain fees could exceed $32 billion in 2026, supported by growth in crypto applications. However, the report notes that a Bitcoin drawdown could test how resilient protocol fee streams are across different crypto sectors.
1kx’s framework finds that most crypto fee categories correlate positively with Bitcoin prices. The report highlights that the sensitivity of fees to Bitcoin varies by sector, and that the same correlation can translate into very different outcomes depending on how quickly sector fees move relative to Bitcoin.
Liquid staking and vault curation are described as highly sensitive to Bitcoin’s performance, with fees expanding during bullish periods and contracting sharply during downturns. The report links liquid staking and restaking fees to yield dynamics tied to borrowed capital and risk appetite. For vault curators, asset inflows tend to follow positive price momentum, but can reverse quickly when conditions deteriorate.
Launchpads are also portrayed as sentiment-driven: they tend to thrive in bullish markets and stall when confidence drops. Automation and DeFAI protocols are described as tracking transaction activity, benefiting from active markets but facing declines when risk appetite fades.
Beyond sector-specific drivers, 1kx argues that reflexive fee structures can amplify Bitcoin’s price movements. Sectors such as liquid staking and vault curators are singled out as particularly susceptible, experiencing rapid fee growth in rising markets and significant contractions when conditions turn.
Layer-1 blockchains are said to inherit market direction through native token price movements and application activity. The report emphasizes that differences in how blockchains correlate with Bitcoin play a major role in fee dynamics, making cross-sector fee prediction more complex under potential market stress.
DePIN stands out in 1kx’s framework as the lowest-correlation category. The report attributes DePIN fee drivers to the value of compute, bandwidth, and storage services, rather than to Bitcoin price movements. It projects DePIN fees to exceed $450 million in 2026 while maintaining strong growth.
Stablecoin issuers and real-world asset protocols are also described as having lower correlations to Bitcoin. Their fees are influenced by issuance volume, reserves, and assets under management. 1kx characterizes DePIN and similar issuance-linked businesses as having a more robust fee structure because revenue is less tied to speculative trading and more dependent on service utility such as compute and bandwidth. This is presented as a potential advantage in a volatility-driven market where Bitcoin-specific downturns could pressure more sentiment-linked categories.
Decentralized exchanges, lending protocols, and perpetual platforms show a mixed picture. The report notes that trading volume can benefit from volatility even in bear markets, but fee-rate compression remains a risk. It cites median correlations of around 0.33 for DEXs and 0.3 for lending, with derivatives showing higher variability.
1kx reports that price-to-fee (P/F) ratios vary widely across crypto sectors. Blockchains show a median P/F ratio of 3,902x in 2025, far above the 17x average for DeFi and finance. Despite generating significant fees, DeFi and finance account for a smaller portion of total market cap compared with blockchains.
The report also states that fee changes tend to lead valuations, particularly in DeFi and finance. It warns that a Bitcoin drawdown could trigger broader valuation adjustments if fee vulnerabilities are exposed, potentially leading to rapid repricing if fees decline.
1kx frames the outlook as dependent on whether macro conditions remain favorable. If Bitcoin maintains strength, fee lines would expand and downside risks would remain speculative. But a market correction—such as the February drop in which Bitcoin fell by 14.1%—would test the resilience of fee structures across sectors.
Sectors with reflexive fee dynamics, including launchpads and vault curators, are expected to face heightened scrutiny regarding their ability to withstand market stress. The report reiterates that its projection of more than $32 billion in on-chain fees for 2026 depends on continued application growth, and it raises the key question of whether that growth can persist if Bitcoin enters a prolonged drawdown.
In contrast, DePIN’s revenue is described as linked to demand for services like compute and storage rather than direct asset price fluctuations. That distinction is presented as positioning DePIN as potentially more resilient during Bitcoin-specific downturns, offering revenue exposure less dependent on broader speculative cycles.
Finally, 1kx characterizes fee dynamics in decentralized exchanges, lending protocols, and perpetual markets as complex: these sectors may benefit from volatility, but their revenue lines can be unstable in stress scenarios, making them vulnerable to rapid changes in market conditions. The report concludes that the potential impact of fee changes on valuations is significant, especially within DeFi and finance, where valuations often move alongside fee adjustments.
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