Crypto's landscape is tightening fast. According to Lorenzo Valente, ARK Invest’s head of digital assets research, just a handful of projects now dominate the bulk of application revenue. Hyperliquid and Pump.fun alone generate 67%, and when you add Ethena, that figure approaches 80%.
Industry consolidation intensifies
ARK’s latest analysis highlights a dramatic shift in where investment and revenue flow. Application revenue dropped 23% quarter-over-quarter in the first quarter of 2026, totaling around $485 million across protocols. Storj’s Chapter 11 bankruptcy and BitMEX’s shutdown are telling signs of growing consolidation pressure. Valente predicts more mergers, shutdowns, and talent acquisitions as weaker players exit the market.
While exact figures vary ARK’s Q1 report cites Hyperliquid, Pump.fun, and Axiom as responsible for about 67% of app revenue the trend is clear. Capital is becoming extremely selective, rewarding projects with strong product-market fit and pulling away from those that lack it.
Concentration reaches record highs
Valente noted that revenue concentration is hitting unprecedented levels not only in applications but also in middleware and Layer 1 networks. This signals a deeper structural change in the crypto ecosystem, one that could reshape how projects compete for funding and users moving forward.
It’s a far cry from earlier crypto cycles where revenue and investment were more dispersed. Now, the winners take most of the pie, while others either merge or shut down. This shift has implications for developers, investors, and users alike.
Recent data on exchange closures also reflects this trend of market consolidation and selectivity.
This material is informational and not financial advice.
