ABC Research’s recent report reveals a stark reality within the Ethereum decentralized finance (DeFi) ecosystem: the vast majority of protocols operating on the network generate no revenue.
According to the findings, out of 1,271 active DeFi protocols on the Ethereum blockchain, a significant 88% (equivalent to 1,121 protocols) currently generate zero revenue.
The situation intensifies when examining the smaller group that does show revenue generation. Among the remaining 150 protocols that have historically generated some revenue, a further 75% (approximately 113 protocols) exhibit no current revenue activity.
This data points to considerable difficulties for protocols in establishing sustainable business models amid intense competition and evolving market dynamics. The report indicates that achieving profitable growth remains a significant hurdle for the vast majority of projects in the sector.
The findings underscore fundamental challenges facing participants in the competitive DeFi landscape, raising critical questions about long-term viability and sustainable development within the industry.