According to foreign media reports, ARK Invest researcher Lorenzo Valente believes that the crypto industry is undergoing a consolidation deeper than previous bear markets. Funds are flowing more quickly to a few top projects, and teams and platforms lacking products that match the market are finding their space to survive is shrinking.
App revenue is concentrating on leading companies.
The report, citing analysis from ARK Invest, states that Hyperliquid and PumpFun together account for 67% of total application revenue at the crypto application layer. If Ethena is included, the top three projects account for nearly 80% of revenue.
This means that most small and medium-sized projects are not only experiencing slower growth, but also facing shrinking room for continued operation. The article argues that while some projects could previously survive by relying on market sentiment or financing, this buffer is weakening.
The same trend is also emerging in infrastructure and Layer 1.
Valente argues that revenue concentration isn't limited to the application layer; infrastructure and Layer 1 blockchains exhibit a similar pattern. A few projects capture the majority of economic activity, while long-tail projects struggle to gain users, revenue, and capital support.
Based on this, the article concludes that this round of industry consolidation is more like a structural selection process than simply a natural adjustment after a price decline. The key to determining whether a project stays or goes is no longer just market sentiment, but whether it possesses genuine demand and sustainable revenue.
More mergers and acquisitions and shutdowns may occur in the coming months.
Valente anticipates an increase in mergers and acquisitions within the industry in the coming months, with some underfunded projects potentially being acquired or shutting down altogether. Simultaneously, the number of bankruptcy filings may rise, and developers and engineers may move to more financially stable organizations.
The article argues that in a highly concentrated revenue environment, leading companies are more motivated to acquire technology, users, or teams through acquisitions rather than building from scratch. For the market as a whole, this consolidation means that capital and talent will continue to concentrate in the hands of a few winners.
However, for projects at the tail end of the chain, the time left to prove their business model is shrinking. If they cannot establish a stable revenue stream, the next few months could be a critical period determining their survival.
