Who is actually accruing the value created in crypto? This started as a conversation on the @Blockworks TG group with @santiagoroel and a few others. Venture in crypto has shrunk a lot! and imo the main reason is that on-chain revenue pools have been far smaller than anticipated. From Blockworks data, total on-chain revenue was roughly $8B in 2025, so I wanted to see how much off-chain/Centralized companies are capturing from this industry by comparison. So consider the off-chain pool: public companies like coinbase, Gemini, BitGo, Bullish, plus crypto revenue from Robinhood, Galaxy etc and private players like Binance, Tether, FalconX, Anchorage, etc. The result surprised me: off-chain companies generate ~$70B roughly, consider roughly a range between 60B to 100B, 8.5x more than on-chain protocols and L1s. To put that $8B in perspective: even if you give on-chain protocols generous 70% EBITDA margins and a 30x multiple, the entire addressable market cap today is ~$168B ($8B × 70% = $5.6B EBITDA × 30x). That's the whole on-chain pie, less than a single mega-cap tech company. Do the same for centralized companies at a more realistic 40% EBITDA margin: $70B × 40% = $28B EBITDA × 30x = ~$840B of justified market cap. Even with lower margins, that's 5x the entire on-chain ecosystem. And to put even that in perspective: the entire centralized crypto industry, all of it combined, is basically worth one OpenAI or Anthropic. The breakdowns are telling too. On-chain, L1/L2 chains take almost half the pool (~49%), with launchpads/trading apps and DEXs/perps splitting most of the rest. Off-chain, it's exchanges and brokers dominating at ~66%, with stablecoin issuers second at ~19%, everything else (market making, payments, infra, asset mgmt) is single digits. Both worlds are extremely concentrated at the top of the same funnel: trading and the rails to do it. From a venture perspective, you were often better off investing early in L1s and traditional exchanges than in most tokens. It was a bit simpler than we thought. To me the common denominator: off-chain companies sit much closer to the end user than protocols and L1s. They own that relationship and monetize it well. They abstract away crypto's complexity: trade, stake, store, manage without ever touching a coldcard or metamask app and people pay up BIG for that. On-chain is clearly in a bear market, but the lesson for protocols, L1s, and on-chain primitives is to build and verticalize more. Get closer to the end user. One caveat: this is an approximation, done with Claude's help. Many of these companies don't have public earnings, so the private side (Binance, Tether, and especially "other private") is mostly an educated guess. Directionally though, the gap is hard to argue with.

CT missed the most important earnings call of the week. It wasn't a crypto company. It was @Cloudflare Everyone caught the wallet announcement. The real alpha was in the call itself. Today Cloudflare monetizes the internet through subscriptions: security services, AI platform spend, pools of funds. A mix of SaaS and IaaS economics. The CEO was explicit that AI agents are about to break that model. Cloudflare sits in front of roughly 20% of internet traffic. Here's what that traffic looks like from the call: - AI agent requests up 1,700% YoY - Agents crossed 50% of total network traffic this quarter. First time in history non-human traffic is the majority. Management admitted it happened faster than their own models - Their projection: if trends hold, non-human traffic outnumbers human traffic 1000x within 5 years The monetization shift is the key part. The ad-supported internet doesn't work when the visitor is an agent. Cloudflare's CEO answer: block malicious bots for free, charge good agents a tiny fee per request. Fractions of a penny. They want to be the ones defining that layer. Now the throughput math here: - Cloudflare handles ~500M requests per second - They estimate 1 to 10% is monetizable via micro/nanotransactions - That means 10M TPS on day one, scaling to 100M TPS Visa peaks at ~20k TPS The CEO's framing: "we're building this while others compete with Visa." Three to four orders of magnitude beyond card rails. No existing payment network can settle this. It has to be something new. Two conclusions I keep coming back to: - Being short L1 throughput is being short agentic workflows. If agent traffic gets monetized per request, the settlement layer needs to scale orders of magnitude beyond anything live today. - The fee math for L1s flips. Base fees have collapsed across ETH, SOL, everywhere. MEV is getting internalized by apps. Hard to build a base fee revenue case at human scale. But at 10M TPS and $0.001 per transaction, you're looking at ~$315B a year in base fees alone. At 100M TPS the number gets silly. Stablecoins and crypto are the end-game here for Agentic finance @jerallaire @circle