The five crypto apps earning the most revenue

Transcript

GM GM good morning welcome to milroad radio The Daily Show that's as iconic as The Macarena hey we got the moves to make your money Groove I'm Jay Hamilton today we're joined by Kyle reidhead he's the head of research at milro Pro and you might want to listen to him because he first bought Bitcoin at $3,000 damn way Go Kai today we're looking at the top five Revenue generating apps in 2024 and talking about why it matters to you to your Investments and to this cycle Kai welcome back to the show thanks great Intro by the way although I don't really brag that I bought at 3,000 I feel like I know too many people in

the space that were way way earlier than that I think there's a lot more who are later than that so I'd say it's something to brag about uh Kai your your internet might struggle a little bit because I know you're in Nia so uh we'll we'll hopefully work through this episode as best as we can and you'll be coming back uh you'll be leaving Nicaragua soon I think so you might be getting back into better wi-fi soon am I right that's that's correct end of this week although there's like a hurricane here so I might get trapped here we'll see oh no send send help cow's trapped not actually hurricane but it's in bad weather okay before we jump into the top five Revenue generating apps in crypto first question is just Why did you and the milk Road research team decide to

look into this data in the first place what was it about figuring out Revenue generating apps that is so important to you right now I think uh a few reasons um one is for the last 10 12 years of crypto Cycles let's call it it's been dominated by infrastructure it's been dominated by just blockchain right uh Bitcoin was the biggest thing for a while and then eth came in and then there was a bunch of eth killers that came in last cycle you had Solana's big moment and it was always been about blockchain and as great as that is we think blockchain is is one of the greatest inventions that I mean we're going to live through at least um and it provides so much for us at the same time is as

that is they don't really matter if we don't actually get apps that create real use cases on top of them and not just a real use case it has to be a use case that a business can run profitably and if we can't do that then all the blockchains that exists are here for nothing except for maybe Bitcoin because it's it's money so it doesn't need an app it just it is it's it's its own app um but smart contract platforms they need apps for them to actually have value and so there's there's been a lot of talk I guess from the blockwork guys and and actually um Yan who you had on yesterday was talking he said there's only so much blood you can squeeze out of a stone and and he's talking about basically the infra The infrar Rock right the infr stone which is these

blockchains and so to me and there's still plenty of growth left in those and I think but to me I think the next thing we need to be looking at is when are the applications going to be generating real revenues with profitable businesses bringing in real users and show that they can be a sustainable business on their own and I think if you can understand those and capture the upside to those you're going to do extremely well so what are the sectors that are being built on top of blockchains that are going to do well what are the applications within those sectors that are going to do really well and so we've been putting a lot of focus into trying to understand that everyone wants to buy these altcoins because they're the ones that you know have potential to 100x or THX or everyone's asking which altcoin

should I buy next and the problem is most of them are literally just shitcoins most of them just have tons of unlocks they have no Revenue they have no users and they're kind of useless like 95% and it's honestly probably 99% and so we feel that if we can really start to understand what are the apps that are generating real revenues and doing this sustainably we can have an edge in in the market and so I think it's just it's really important and also it's just the thing we want to be celebrating we always talk about the fees that Bitcoin and ethereum are are generating let's talk about the apps and let's celebrate the apps and what they're doing because we need these things to gain adoption and so we want to focus more attention on that on that side of things and move away from the

infra although of course we still invest a ton in that if you've seen our our Pro portfolio it's a it's like 80% of what we invest in but when you start to want to go down the risk curve you got to understand where the fundamentals are in the apps yeah completely and as you said this is a nice follow-up episode to yesterday where we had yeno founder of blockworks on the show and we talked about the coinbase state of crypto Summit which was the who's who of not just crypto but also institutional finance and trafi and one of the statements that Yano made during the show yesterday was that this cycle is finally the cycle for apps we've been waiting for it to happen and he believes it's coming not because he's saying that himself but because that was a statement

that many of these leaders made at the coinbase summit the infro finally ready right so like the infrastructure is what I'm saying there is finally ready for it like we couldn't have this nether Cycles because like we had a eum but ethereum was tooo slow for like real apps right now we have bass we have salana we have all these faster high performance chains we have ton Network and so we can build real apps on them and get millions of users on them and they still work and we've never really had that before and so now we're ready and a lot of investment in the space is going into the apps um salana most of its investment goes into applications ethereum most investment has always got infrastructure that is finally moving to the app side uh consumer apps and so I think this is going to and it takes a

while to build these things once you get investment but I think it's the next big movement in crypto in my opinion and probably happens in this cycle okay without further Ado then let's jump in and look at these uh what are the top five performing apps in terms of Revenue so far in 2024 yeah so we looked up year-to date to see which apps are Genera the most onchain revenue and um and so the five are maker is number one which is one we've been talking about a ton here and and a obviously investment that I'm super bullish on as we talked about last week generated over $157 million in the last less than six months um which is a beast of a revenue generation for an application like that so that's super cool um that's the

biggest and biggest by a long show almost double anything else second though comes in at Athena uh then we have Aerodrome at third so Athena was at about 80 million Aerodrome 74 million then Lio which is the largest staking protocol in the space um by tvl they brought in 54 million and then interestingly pump. fund which is wild because their revenues really didn't start until uh around March um and so like they have generated $ 42 million 42 million but it's not really since January to now it's basically in the last like three months I think they brought in 30 million in the last like month um which is wild now will they sustain that unsure we can go through each of these I can give my like

thoughts on them um but um that's been a wild story for pump. fun to be up there beats out I mean you think of the other big ones you might would have in here swap pancake swap like a lot of the decks is where most of the users are and um and only aerody Drome made it which is is wild it's also amazing that pump off fun hasn't even gotten the benefit of being around for all these six months that these other apps have gotten so well Athena as well technically true true uh okay let's let's go through each of these apps and just talk a little bit about what they do and their business that is really allowing them to generate this revenue and then I want want to Circle back around and I want to talk about how this understanding this Revenue impacts your investment thesis

towards maybe these particular tokens but also how it helps you think about blockchain adoption as a whole and maybe more of a zoom out about the categories and use cases that we are seeing get the most adoption from actual users but let's start with maker so give us a little bit of a we've talked Lots about maker but give us a brief overview of what is maker and how are they generating this incredible Revenue yeah it's important to not just look at um just the numbers on like defi llama or whatever and see who's making the most or who made the most in the last month it's you want to understand who's making the most but actually has a sustainable business model right and like is it just a hype cycle or is this thing going to

actually stick around for a while um and so that's why looking in and understanding how are these apps making money actually matters so maker for example is one that we believe this is sustainable and will actually just continue to grow um maker is a bank for the ethereum ecosystem we talked a ton about this last week so I won't bore everyone again on that if you want to listen and learn more about maker probably just go listen to that episode um but it's essentially a bank um and the way that they make money is by lending out um or or minting a a new stable coin called die um that they'll mint out for those that give collateral into the put collateral into the bank of maker uh and so obviously when you do that there is an interest that you have to pay back and so they make their money

that way they also make their money on Swap fees for some of the their tokens uh and then also for liquidations now there's not a lot of Liquidations in Bull markets this really happens at the top of a bull market in the bear they make a ton of money um but that's not like a sustainable thing where they're making it every single month it mainly comes in um at the top of Cycles but it's there um there's actually one other way that they make Revenue which is they have a treasury so they make a ton of money and they take some of that money or some of that collateral and they'll put it into treasuries and they make a yield off that so obviously with high interest rates they've been making a ton off that over the last last few um last few years so they're just a they're

basically the same way as that a a Traditional Bank would make money it's just all done on chain um and so as long as the ethereum ecosystem grows uh Maker's going to grow there's just no doubt in my mind and as you said uh you can go back to last Wednesday we had a whole episode breaking down maker and why we believe it's one of the most undervalued Assets in crypto right now Kai let's go to Athena tell us about Athena what they do and how they're generating this Revenue yeah Athena you can think of very similar to to maker in the sense that it's also a stable coin provider interesting that those are the the the top two in the space um Athena their style is just a little bit different so in maker you over collateralize to get your die your stable coin um in Athena you don't

necessarily need to do that you just give eth they turn that eth into Stak eth um and then they also put a short position on eth and so if eth goes up or down they're making money and they basically take some of that Revenue uh and give it to those who are holding the stable coin s us de I believe it's called which is the the Athena stable coin so two different ways of basically issuing stable coins and in the back end kind of just being a a bank you could call it both are very profitable businesses both obviously there's a big need for people want to take out leverage especially during bull markets but even more so people just want access to the US dollar um that can move globally uh without all the slowness and the costs and the fees associated with doing it when it's like fiat currency um

so I think both D and us de so Athena maker stable coins are set up to to grow as a result of just stable coins being probably the best use case we have in crypto uh and on the back end being a provider of that um they make a lot of money we've already seen Circle and tether both very successful companies issuing stable coins they're centralized we can't invest in them at least not yet until they go public these are the ones that we can invest in um that are doing it all on chain pretty cool love it super exciting to see two stable coins upfront clear use case winner right now let's go to aerodome we don't talk a ton about aerodome this might be one of the less known apps on this list yeah so Aerodrome is um is a decentralized exchange on top of uh on top of Bas um

and this one is basically is kind of interesting I mean Unis swap you think of as sort of the king uh in terms of of dexes but Aerodrome happened to just sort of reach product Market fit on Bas and then Bas just blew up right mem coins a bunch of other tokens that exist there and Aerodrome has managed to take most not most but a lot of the volume um that's happening on Bas and Bas just is continuing to grow continuing to get more users Contin to get more activity uh and AER Drome continues to just be the place for that so you can see in the chart here that um it was more than um it's more than 50% of all weekly volumes um uh that are happening on base right now so it's a beast now will it keep that this one I don't know um it's tough

to beat the king Unis swap maybe you can do it for a short period of time on a specific chain pancake swap for example has been doing it on andb for a long time and Unis swap has never been able to take that over maybe they're not really trying to not sure but I would imagine Unis swap is going to try and take this over on base so we'll see what happens here but either way Dex is the most commonly used app that we have on chain if you look at the apps that have the most users not necessarily the most Revenue generating it's all dexes the top like five maybe even top 10 it's all dexes so obviously the point of crypto is to have tokens for different reasons and people need to swap those tokens Dex is where you do it if you can get those

volumes you can make a ton of money but just taking a little bit of fee on every swap which is what Aerodrome does so long-term bullish on Aerodrome shortterm watch and wait and see yeah I don't know I I um there are a lot of people that are bullish on AER Drome I don't see why they beat out Unis swap but happy to be proved wrong okay let's go to number four on the list is Lio yeah Lio so we've written and talked a ton about staking obviously we think it's one of the the biggest industries that's coming out of of crypto here which is um to help secure the networks these blockchains but also earn a yield while you do it um and then more importantly get another token that you can use in Defi and do stuff with uh and so la was kind of the

first to do this and they are now the biggest they're actually the biggest app by tvl in all of crypto uh something like 32 billion doar they have accumulated over the last uh three or four years that they've been in business um and I see no reason of that necessarily slowing down um now they make their money by I mean they provide an amazing service right so if you want to help secure the network of ethereum you want to generate some yield off of that um you could either run your own validator which is very technical and you need 32 eth so most people don't have that that's like over $100,000 so instead you can just take one eth or half an eth or 0. one eth you can put it in the lader protocol and you get all the same benefits without all the

complexities of running your own validator um and so basically they pass all that yield off to you but Lio takes 10% of that uh and so makes sense it's fair I think it's a great business model uh maybe they won't always be able to take 10 that might go down let's see but either way they're making a ton of money from that and as eth price goes up even if they don't get any more Capital they don't get any more users their revenues just go up automatically as a result of eth going up so um it's a it's a beast of a business model and if you believe in blockchains in in proof of stake blockchains then you believe like there's no doubt that this thing just continues to to print money who do you stake your eth with Kai uh on ethereum I have some in uh stake

deth which is Lio and I have most of it with rocket pool which is a competitor to them uh and just one I've been using longer than I have than I have Lio okay so not necessarily because of a better product versus the other just uh you got in one first La was getting a lot of market share and I felt that could be problematic uh and so I wanted to support some of the smaller ones and also Rock rocket Bulls focus a lot on decentralization so I feel it might be a little bit more secure but both of them are great all right well another conversation for another day perhaps uh let's go to number five on the list is pumped up fun yeah probably the most surprising of them all no one would have predicted I think last year if you told me what were going to be the biggest

ones you probably could have said something to do with stable coins something to do with staking dexes uh meme coins was not going to be my my answer that's for sure but pump. fun which is basically a deployer for mem coins um they've just recently surpassed a million meme coins uh uh something like $ 32 billion they have accumulated over the last uh three or four years that they've been in business um and I see no reason of that necessarily slowing down um now they make their money by I mean they provide an amazing service right so if you want to help secure the network of ethereum you want to generate some yield off of that um you could either run your own validator which is very technical and you need 32 eth so most people don't have that that's like over $100,000 so in instead

you can just take one eth or half an eth or0 one e you can put it in the ladder protocol and you get all the same benefits without all the complexities of running your own validator um and so basically they pass all that yield off to you but lle takes 10% of that uh and so makes sense it's fair I think it's a great business model uh maybe they won't always be able to take 10 that might go down let's see but either way they're making a ton of money from that and as e price goes up even if they don't get any more Capital they don't get any more users their revenues just go up automatically as a result of eth going up so um it's a it's a beast of a business model and if you believe in blockchains and in proof of stake

blockchains then you believe like there's no doubt that this thing just continues to to print money I think that it's very likely that the hyp of me coins continues to rip throughout the cycle and then crashes at the end of the cycle the same way that nfts crashed at the end of last cycle so buyer beware yeah but but the thing is like does it go away for good like nfts still exist just in different forms we don't necessarily care about 10,000k you know pfps but we care about some forms of nfts for some certain reasons use cases which means like the the tools that were built around MTS can still be useful and are still good businesses long term and so that's the question of this one is like yes 100% we don't have millions of

these things um at the end of this cycle but is there something that continues and this things in pumped up fund can continue to be like an important tool in it that's what I'm unsure of like openc kind of a relevant now but they're magic Eden super relevant right yeah there's definitely a place for these tools to continue to exist definitely regardless of the fact that many meme coins will go to zero there will still be many tokens that people want to launch and that still do do well even in even in a bare market so I agree that the tool itself still has potential but the overall size of the tokens launching is definitely going to change when we're not in a bull market anymore uh Kai let's go to uh you and the research team put together this

uh this research to figure out which these top five performing apps were um you and I were talking before we hit record that you know what are the sort of the takeaways the lessons that you learned from this and we talked a little bit about uh blockchain adoption and where adoption is heading we talked a little bit about how this impacts your investment strategy and then we also talked a bit about um noticing which use cases and which categories of apps are the most popular we don't necessarily have time to talk about all three of these lessons or takeaways um but I'll cue you up to sort of is there one that you wanted to discuss or you can quickly discuss all three uh to share why you think our audience what they can learn

from knowing these top five apps yeah I mean so a couple things that I'm just going to go on a rant about here I think the first interesting thing was that the top two are stable coins and I think that probably grows I think like those two probably run away from the pack um because stable coins have gained three $30 billion in market cap this year alone uh and we're only halfway through the year so and it's getting faster and faster the the growth that they're hitting so I think stable coins have reached an inflection point and so the providers for them are just going to continue to grow now the question is regardless of it's stable coins if it's dexes if it's something else they're making a bunch of Revenue why does this really matter and what what like what are they doing with that Revenue that's

what matters here and I think what we're going to start to see and I remember calling this last year and I said the super cycle doesn't come until we figure out how to create prots that generate real sustainable revenues and find a way to ACR that value back to the Token holders right why would you ever not hold these tokens if they can do that and I think we're going to start to see that here with some of these applications for example maker makes a ton of Revenue now it has expenses and things it needs to to pay for but it's leftovers it buys back maker right so every month or every day I don't know how frequently they do this it's just always buying maker token back and why is that important well that's that's Demand on the token that's happening every day kind of the Bitcoin ETFs right

we talk about that being demand same thing here with maker but it's happening with sustainable revenues every single day as it makes money just buys back more maker what does that do well it creates a flywheel where it tells investors hey you can buy this token because there's always demand there's always buy pressure for it and then maker can reuse those tokens down the road to incentivize people to use its protocols or give more percentage out to its holders right because it's obviously giving money to people who hold SDI um and so you can do a lot more things things with a token that maintains or grows in value and if you Contin consistently buy it back you can consistently hand it out right now we have a problem in this industry where tokens launch and then basically protocols just they have they're not

making any money there's no buying Demand on this token and they just give out the token through airdrops and it just people keep selling it people keep selling it and then they run out of tokens and they're like okay now what we're basically done whereas if we can create real revenues and start to buy these tokens back we have this feedback loop that just kind of Never Ends where it always creates buying pressure and allows that company or that protocol story to keep pushing demand through incentives right but it's a it's a balance that we need to find here and I think some of these applications that we see in the top five here are going to start to do that and if you see them do that these are the tokens you want to be investing in right after the the bull market we've always say all these

altcoins are going to go to it's even happening now you look at markets have been tough the last little while and it's because most of these tokens most of these altcoins there's just there's so much Supply being put out every single day because there's all these unlocks so there's investors selling and selling and selling so like why would you ever hold those things right this is why we don't hold much of them in our portfolio but if you can find those ones that have these fly wheels of BuyBacks I think it's a massive opportunity there's just not many that do it there's actually basically none but they're coming yeah that's a that's a really great Point uh Kai thanks so much to you and the research team for putting this together for showing us uh these apps and breaking it down in a way that we

just don't look at often enough everybody needs to be f focus more on the revenue and building sustainable businesses uh but it's just so uh it's so tasty and so tempting to get stuck in market cap and fdv and valuations of these tokens and just trading them when really we got to remember there's real businesses being built here so shout out to you and to the rest of the team for putting this together thanks for joining us today in case you missed it the ZK sync airdrop finally happened it air dropped at a 900 million market cap and a 5 billion fdv fully diluted value now what we noticed is that nearly 41% of the 10,000 wallets who received the

token have already sold their entire allocation the amount sold across all of these wallets was over 486 million tokens which represents approximately 14% of the supply indicating no surprise that a lot of this was airdrop farming the story will be told in the next few months as we see if ZK sync can maintain their price can maintain their fdv in the face of losing their incentive campaign and their airdrop Farmers next up djt which is a salono based meme coin that launched a few months ago saw its price rise 180% on Monday which got our

heads turning when the rest of the market was red what the heck happened with this meme coin which got its market cap to 374 million well what's the reason guessed it another Donald Trump rumor so there is rumors circling that Donald Trump himself is the driving force behind this token obviously if true I mean yeah it would not surprise me at all he's already launched an nft collection it would obviously be the first time in history that a presidential candidate has created a meme coin at the same time as he is running for office you can't make this up folks we'll see how this goes and we'll keep you in the loop uh yeah just you know Meme coins go up down

sideways especially during volatile times like this so D yo R and be careful out there finally uh a recent app launched that's called time.fun now this app allows you to tokenize your time it's built on base and essentially anyone can go into the app and you can sell tokens representing your time and then those who buy those tokens can either trade them on the open market or they can redeem them at any point for access to your time will this app make it will it be the next fantasy top or the next F Tech I don't know it's too early to tell but as we talked about in today's show this is the cycle of

apps there is now the infrastructure for there to be apps which have great ux which are easy for customers to on board to so let's see if time.fun is the next app to catch the wave and grow or it will be something else whatever it is we'll keep you guys in the loop on it thanks so much for joining in today and for listening have yourselves a wicked awesome day thank you for listening to milk Road radio the easiest path to get smarter about crypto if you like this episode share it and hit subscribe or follow so you don't miss out on the next one there's also a link in the description to our free 5minute daily newsletter where we simplify crypto for you while making you laugh and if you're to step up your crypto investing game then we'll leave a link to milk Road Pro

as well your number one resource to help you invest successfully in crypto one final note this podcast is for educational purposes only and nothing we say is financial advice crypto is risky so you should never invest more than you're willing to lose thank you friends and we'll see you in the next one