10 Web3 Businesses That Made $5M+
Crypto needs viable business model.
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
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
(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
(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 $
(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
(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
(6) Perp Protocol - $39M in earnings
0.1% tx fee
The derivatives platform charges a 0.1% take rate fee for every trade executed
(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
(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
(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
(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
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.
