Pensive Pragmatism by Marco Manoppo

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10 Web3 Businesses That Made $5M+

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10 Web3 Businesses That Made $5M+

Crypto needs viable business model.

Marco Manoppo
Dec 20, 2022
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10 Web3 Businesses That Made $5M+

pensivepragmatism.substack.com

Disclaimer, NFA, all that legal stuff: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.


Hi folks 🙋🏻‍♂️,

A few months back, I wrote a viral thread on the title of this issue. This is an article rendition of that thread, for those of you who haven’t seen it. Enjoy!

Context 📝

These are earnings, not fees or revenue. Also not "net profit" -- considering salaries and other operational costs, the numbers will be significantly lower.

From Token Terminal:

  • 💸 Fees: what the protocol's end users pay in fees to use the protocol

  • 🛒 Revenue: % that the protocol captures from the fees

  • 🥕 Token incentives: governance tokens that the protocol distributes to users as an additional incentive

  • 💰 Earnings: Revenue - Token incentives

Since the thread was published, the list of the companies has changed slightly.

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12 Web3 Businesses That Made $5M+

Snapshot date: October 22, 2022

Image
Source: Token Terminal

Let's break down their business models.

(1) OpenSea - $850M in earnings

  • 2.5% tx fees

  • OS charges 2.5% for every NFT sale

  • Nothing much to unpack, it's the oldest playbook. Any dominant marketplaces make money. More volume -> more $$$

  • At its peak, OS had a consistent $2B+ monthly volume

  • That's $50M+/mo gross profit

Image

(2) MetaMask - $320M in earnings

  • 0.875% swap fees

  • MetaMask charges 0.875% for every swap done in its wallet

  • It routes trades to multiple liquidity sources including Uniswap, 1inch, etc. Turns out, people are lazy

Twitter avatar for @CroissantEth
👨‍🍳.eth @CroissantEth
Let’s put these numbers into perspective. In just over a year Swaps has 1,229,857 users with $20B in total volume. For every $1000 traded Metamask earns $8.75 Sushi earns $0.5 Curve earns $0.2 The combined revenue of Sushi & Curve this year is not even half of MetaMask’s.
Image
2:46 AM ∙ May 22, 2022
333Likes30Retweets

(3) MakerDAO - $142M in earnings

  • stability fee (varies depending on the vaults)

  • The stablecoin provider garners fees by charging $DAI minters (similar to borrowing fees).

  • If $DAI demands increase, Maker earns more $

Image

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(4) PancakeSwap - $89M in earnings

  • 0.25% swap fee (0.0225% goes to the Treasury)

  • 3% prediction fee

  • other products fee

  • Pancake is a platform with AMMs, prediction markets, lottery, and upcoming NFT marketplaces. Basically, it makes $ from tx and marketplace fees

Twitter avatar for @DefiIgnas
Ignas | DeFi Research @DefiIgnas
7/ The engine of Pancakeswap is its $CAKE token. Similar to $BNB itself, Pancakeswap team burns $CAKE from protocol revenue. Higher revenue -> burn more $CAKE -> price up. Thus more chains -> more users -> more revenue. Elementary, my dear Watson.
Image
3:03 PM ∙ Oct 19, 2022
71Likes5Retweets

(5) Ethereum Name Service - $72M in earnings

  • .eth domain sale fee

  • $5/year domain renewal fee

  • they sell .eth domains, make money from it, and make money from the yearly renewal -- pretty straightforward ENS recurring fee

Image

(6) Perp Protocol - $39M in earnings

  • 0.1% tx fee

  • The derivatives platform charges a 0.1% take rate fee for every trade executed

Image

(7) Decentral Games - $35M in earnings

  • $20M NFT mints revenue

  • $3.1M NFT activation revenue

  • in-game upgrade and secondary sales revenue

  • The poker game made most of its money $ from NFT sales (initial inventory sales) but has also monetized from in-game activities

Image

(8) 1inch - $32M in earnings

  • swap surplus fee

  • 1inch is an aggregator with no fee, how are they making money?

  • tl;dr -- swap surplus between the time of the quote and the time the tx is mined see below

Image

(9) Foundation - $26M in earnings

  • 5% marketplace fee

  • reserves the right to charge up to 15% of the total sales price

  • Foundation charges 5% for every NFT sale on its marketplace

Image

(10) DeFiSaver - $12M in earnings

  • 0.1% same-value asset swap fee

  • 0.25% swap fee

  • 0.25% advanced service fee (smart savings, collateral/debt shifts, boost, create leveraged positions, etc.)

  • The DeFi management platform basically charges fees to make things easier for users

Image

Argentina Campeon Del Mundo

Given the crypto craziness in the past few months, we all need a tad bit of realism. There’s so much more to life than crypto or the markets. Going out and experiencing life, will also make you a better thinker and operator. Allow me to share one beautiful human moment.

This past weekend, Argentina won its first world cup since 1986. What a freaking match. Messi finally got the only cup he hasn’t won 🐐 and we got so many incredible human moments from all over the world, especially in Argentina. I’m not even a soccer fan… oops, I mean football — but Andrés Cantor’s passion below made me teared up. The Telemundo announcer went viral for his passionate rendition of Argentina’s final goal that made the country the world cup champion.

It has been 36 years.

Until next time,

Marco M.


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