Application Cycle Dawns as Blockspace Abundance Shifts Value to Apps, Asian Developers Lead
Crypto’s long-awaited application cycle has begun as Ethereum upgrades and Layer 2 solutions make blockspace abundant, driving value capture from base protocols to applications. Application-layer fees now account for about 80% of on-chain revenue, with stablecoins, DeFi, and wallets leading. In 2024, Asian blockchain developers surpassed North America with a 32% share, positioning Chinese teams advantageously for rapid iteration, global operations, and application development. Representative projects include Rabby Wallet, gmgn.ai, and Pendle. Primary market investment should target trading/perpetual, asset issuance, and financialized applications like Hyperliquid and Pump.fun. Strategy favors “track beta” sectors—tool projects in prediction markets—over riskier alt-cycles. User acquisition will hinge on mobile front ends, aggregated trading interfaces, and wallets as traffic gateways. Infrastructure investments must focus on application services—custom multi-chain deployment, onboarding solutions, and secure cross-chain bridges—to support this application cycle era.
Bullish
This news is bullish because the shift to an application cycle indicates growing on-chain activity and solid revenue streams from application-layer fees, which can support token value through fees, buybacks, and sustainable growth. Blockspace abundance lowers transaction costs and expands user adoption, while the rise of Asian developers—with a 32% share—brings strong engineering and rapid iteration to DeFi apps. Historically, similar shifts in technology cycles (e.g., post-dot-com) led to new market leaders. In the short term, traders can expect higher volumes in apps and wallets; in the long term, the ecosystem matures with resilient use cases and revenue models, underpinning market stability and expansion.