Written by: Joey Shin @IOSG

The crypto industry claims to lack users every day, but the data tells a different story. The number of active users in consumer-level crypto has long reached tens of millions, but they are simply not visible in the sights of Silicon Valley and New York. These users are in Manila, Lagos, Buenos Aires, and Hanoi, using Coins.ph (18 million users), MiniPay (4.2 million weekly active), Lemon Cash (Argentina's number one app), yet English media has barely reported on them. Conversely, the protocols that Western VCs discuss daily generate less daily activity than what Tron’s shadow settlement network sees in just an hour.

Seven core conclusions: the user issue in crypto is essentially a geographical issue; Tron is the most important consumer-level public chain, yet no one talks about it in NYC and SF; on-chain e-commerce barely exists; the largest prediction market is centralized; revenue and user count often move in opposite directions; the perpetual DEX battle has already concluded; and there are indeed consumer crypto companies that make real money—just not those that resemble DeFi.

Payments and New Banking: Users Have Long Existed, Just Not in VCs' Sight

Common perception: crypto needs to enter the mainstream, and must bring the next billion users, with wallet UX as the bottleneck.

Data shows: the next billion users are already present, and the biggest bottleneck is not customer acquisition, but monetization.

Let's start with the existing scale. Telegram Wallet claims 150 million registered users (unverified—low confidence), so let’s set that aside. Looking only at verified data, the user base is already staggering: Coins.ph has 18 million confirmed users in the Philippines, primarily operating based on Tron’s USDT track; MiniPay, as Opera's mobile stablecoin wallet on Celo, had 14 million registered users and 4.23 million weekly active USDT users as of March 2026, with a monthly transaction volume of $153 million and on-chain activity growing 506% year-on-year (high confidence—joint disclosure from Tether/Opera/Celo). Chipper Cash covers 7 million users across 9 African countries and has recently turned cash flow positive. Lemon Cash has 5.4 million downloads, ranking first in financial apps in both Argentina and Peru, with MAU quadrupling since 2021. Paga in Nigeria processes an annual transaction volume of 17 trillion naira, though the crypto-related proportion is unclear (medium confidence).

The only payment company that has achieved both scale and revenue is RedotPay: 6 million users, annualized revenue of $158 million, and annualized transaction volume of $10 billion, with its valuation increasing 16 times since the seed round (high confidence—The Block, CoinDesk, company disclosures). RedotPay's model is a crypto-to-fiat card processor for the Asia-Pacific region, earning commissions per transaction with zero chargeback risk—essentially a crypto-native Visa merchant acquirer. It is currently the clearest case demonstrating that consumer crypto can generate genuine, recurring, non-incentive-driven revenue at scale.

Another highlight on the revenue side is Exodus, which disclosed in its SEC 8-K that its 2025 revenue is projected to be $121.6 million (high confidence), making it one of the few publicly listed and audited consumer crypto companies in the US market. Its revenue comes from exchange and staking fees from 1.5 million MAUs, with stock trading under the EXOD ticker on the NYSE.

Ether.fi’s Cash product stands out as a notable DeFi-native entrant: profitable in its first year, issuing over 70,000 cards, with Cash currently contributing about 50% of total revenue and a monthly income of $2.8 million (high confidence—verified daily by TokenTerminal). It proves that a DeFi protocol can create genuine consumer products—although 200,000 total users still defines a niche market.

The user acquisition problem in emerging markets has been resolved, but the monetization issue remains. The disparity between MiniPay’s 4.2 million weekly actives and its undisclosed (speculated to be very low) revenue might be the largest unresolved question in the crypto industry—and also the biggest opportunity.

Marginal Improvements vs. Non-Incremental Value: Refined Screening Criteria

A common rebuttal against consumer-level crypto investments is that crypto must provide non-incremental value relative to fiat alternatives in order to offset integration costs. Data indicates that the premise of this test is itself flawed. Comparing the two clearest data points in the payments category. MiniPay's advantages over traditional mobile currency products like M-Pesa are at best marginal—slightly cheaper transfers, slightly wider USD exposure, slightly greater cross-border coverage. It has 4.2 million weekly active users, with revenue essentially zero. RedotPay's advantages over traditional Visa merchant acquirers are similarly marginal in consumer experience—swiping cards, buying hot dogs—but its underlying mechanisms are structurally different: zero chargeback risk, instant cross-border settlement, with no reliance on correspondent banks. RedotPay generates $158 million in annualized revenue from its 6 million users.

Both products work, and both exhibit product-market fit. The difference lies in RedotPay's "marginal yet structural" advantages that compound into pricing power, while MiniPay's advantages are "marginal and superficial" and do not. Zero chargebacks isn't a function users will notice, but it permanently captures about 1.5% gross margin on every transaction for the issuer. Slightly cheaper transfers are something users only value once and, after getting used to it, no longer attribute value to.

Thus, the correct screening question is not "Is this non-incremental?" but rather "Does this marginal improvement map to structural economic characteristics?" If the answer is affirmative—chargeback risk, settlement timing, correspondent banks, capital efficiency, custody cost—then a product that feels almost unchanged to the user can still compound into a large business. If the answer is negative, then even a product with tens of millions of users lacks investment value. Both types exist in consumer-level crypto, and conflating them has already cost this category a whole generation of capital.

Common perception: Crypto payments are gradually being adopted by e-commerce; it's just a matter of time.

Data shows: Not a single on-chain e-commerce protocol on DeFiLlama reports daily revenue exceeding $10,000. It's not just "very little," it's literally zero.

This chapter is not about the competition among early players, but rather the absence of competitors. After auditing all protocols tracked by DeFiLlama and TokenTerminal, and all companies disclosed publicly, we found only one noteworthy player: Travala, a centralized travel booking platform, reported $7.17 million in revenue for February 2026 (medium confidence—self-reported, without independent verification). Travala is not a protocol; it’s a travel agency that accepts cryptocurrency.

UQUID claims to have 220 million users and 50 million monthly visits (the 220 million figure actually represents users of partnered platforms—like Binance—not UQUID’s own users). The headline figures are misleading, but its product catalog is indeed quite large—175 million physical goods, 546,000 digital goods—while Tron’s proportion of its transaction volume doubled to 39% in the first half of 2025, with 54% of transactions priced in USDT-TRC20. But there is no public revenue data, and the user figures do not hold up to scrutiny.

Gift card and voucher service provider Bitrefill has a monthly revenue of approximately $1 million (low confidence—estimated by Growjo, historically inaccurate). Besides this, there are no other noteworthy on-chain e-commerce protocols.

What truly exists is a shadow e-commerce economy operating on the Tron USDT track—but it is P2P and completely informal. Coins.ph processes remittances for overseas Filipino workers, funneling funds into retail consumption. Nigeria’s P2P ecosystem guides $59 billion in crypto transaction volume annually via OTC desks and dollar savings accounts (from Chainalysis), acting as an alternative to a fractured banking system. In Argentina, SUBE transit recharges are completed via Tron USDT and cash OTC channels. Freelancers in Vietnam receive their salaries in TRC-20 USDT and then exchange through local P2P networks.

This is genuine economic activity—but it is not e-commerce infrastructure. No protocol has truly captured any part of it. The entire e-commerce stack—from product selection, checkout, custody, fulfillment tracking, dispute resolution, to loyalty points—is virtually blank.

How much of this demand will remain after compliance?

Before declaring this the largest product gap in crypto, one must answer a more difficult question: how much of the existing demand is structural, and how much is regulatory arbitrage? The honest assessment is that the vast majority is regulatory arbitrage. Currently, the mainstream use cases on the Tron-USDT e-commerce track divide into three categories: the dollar exposure needs of users in capital-controlled areas (Argentina, Venezuela, Nigeria)—these users cannot legally hold dollars through traditional channels; evasion of VAT, sales tax, and import duties, especially on digital goods and gift cards—tax authorities find it difficult to verify buyer identity; and cross-border payments for freelance and gig work circumventing bank controls—primarily in Vietnam, Iran, and parts of Africa. UQUID's product catalog is heavily skewed towards gift cards, top-up services, and digital goods—these categories exist precisely because they can convert opaque crypto balances into consumable fiat equivalents with almost no identity friction.

This is crucial for the investment thesis, as the survival rates of regulatory arbitrage demands under compliance vary significantly. Domestic VAT and tax evasion needs essentially become zero the moment merchants are required to enforce KYC—these users are paying not for a better checkout experience, but for "not having a tax ID"—the value evaporates the moment a tax ID is requested. Demand to evade currency controls is somewhat more enduring, as its underlying issues (Argentina's capital controls, Nigeria's naira controls, Venezuela's bolivar) are structural and long-standing. However, platforms serving these demands cannot operate legally in the necessary corridors. They can grow, but cannot register, cannot conduct priced financing, and cannot partner with local fintech companies for issuance—these partnerships are key for establishing competitive moats.

Opportunities that can survive compliance are narrow but real. Cross-border merchant settlements that are slow or expensive in traditional tracks—Latin America to Asia, Africa to anywhere, payment collection for freelancers—can work under any regulatory framework, because the underlying value proposition is that "stablecoins are structurally cheaper than SWIFT," not "stablecoins help you circumvent rules." B2B settlements between SMEs in different jurisdictions also fall into this category. Merchant settlements for cross-border digital services do as well.

Thus, the term "a $5 trillion global e-commerce" is a wrong framework for this opportunity. The truly investable space is much closer to the $200 billion to $400 billion cross-border B2B and freelancer payment market—whose value proposition can transition from the gray area to the legitimate market. Domestic crypto checkout aimed at Western consumers—the very thing most "crypto payments" discussions imagine—is not this opportunity, and never has been. The protocols that will win in this category will look more like "the stablecoin version of Wise" rather than "the crypto version of Shopify." For investors, the key question is whether a team is building for a market that can survive, or for a market that is about to disappear.

Speculation: The Perpetual War Has Already Ended

Common perception: decentralized perpetuals represent a competitive market, with dYdX, GMX, etc., vying for market share with Hyperliquid.

Data shows: Hyperliquid has already won. GMX and dYdX are not competitors but are protocols in terminal decline.

Hyperliquid currently controls over 70% of all open contracts on-chain perpetual venues, with a monthly nominal trading volume of $105 billion, and generated $58.8 million in fees in just March—annualized over $640 million (high confidence—TokenTerminal, DeFiLlama, Dune). In the latest reporting period, its fees grew 56% month-on-month. It has executed over $800 million in HYPE buybacks, making it one of the few protocols where token value capture is not just talk.

Comparing with established players. GMX has daily revenue of $5,000, with around 500 daily active users. dYdX has daily revenue of $10,000 to $13,000, with 1,300 daily active users, and its fees have declined by 84% year-on-year. These are not struggling competitors—they are protocols where the race has mathematically ended, not strategically.

Data from edgeX is worth noting: verified fees of $14.7 million over 30 days, with a fee retention rate of 73%, operating on the StarkEx ZK-rollup. A previous dataset erroneously indicated $2.5 million; corrected, edgeX secures its position as the second-ranking on-chain perpetual venue by revenue (high confidence—TokenTerminal daily verification). Whether edgeX can sustain growth or will follow the path of GMX/dYdX remains the only unanswered question in this category.

What makes Hyperliquid worth analyzing is not a better trading UX—it does have real but marginal differences compared to GMX or dYdX in order execution. It succeeds on liquidity depth, asset listing speed, and branding. Once perpetual liquidity concentrates in one venue, network effects become virtually unshakeable: traders go to where the spreads are tightest, the tightest spreads are in the highest volume areas, and volume flows back to where the traders are. The perpetual DEX category has completed its winner-takes-all phase, and deploying capital to compete against Hyperliquid is akin to setting money on fire.

Prediction Markets: This is a Category Choice Story, Not a Decentralization Story

Another speculative category worth examining is prediction markets, with the mainstream narrative stating that Polymarket validated the on-chain prediction market route. Data narrates a different story—and the lessons of this story have nothing to do with decentralization.

Kalshi operates as off-chain/like CEX. The comparison itself is where the insight lies.

According to Bloomberg reports (high confidence), by March 2026, Kalshi’s annualized revenue reached $1.5 billion, with a valuation of $22 billion. In February 2026 alone, it processed over $10 billion in transaction volume, with volume growing 12 times within six months. Sports betting contributed 89% of its revenue. The on-chain alternative Polymarket has monthly revenues of $4.7 million to $5.9 million, with 688,000 MAUs. Kalshi’s monthly revenue is about 25 times that of Polymarket.

The lazy explanation is that Polymarket has UX issues. By most product dimensions, Polymarket is better built—it has a cleaner order book, faster settlements, and the trader experience is even more mature than Kalshi's. The UX argument cannot support a 25x revenue gap. The defense that Polymarket "has not started charging" actually worsens the comparison, rather than improving it: if Polymarket loses 25 to 1 without any fees, then the underlying revenue potential gap is likely even greater than the surface numbers suggest.

The real explanation lies in category choice, distribution channels, and jurisdiction positioning—these three elements have nothing to do with decentralization.

Kalshi chose sports. Sports is a high-frequency, mainstream, structurally recurrent category: there are betting opportunities every week, every day, every year; the rules are widely understood, and audiences refresh themselves with every new season. Users coming to Polymarket for the 2024 elections have no reason to return in March 2026. Users coming to Kalshi for the NFL have reason to return every Sunday. Frequent participation compounds into liquidity, liquidity compounds into spreads, and spreads compound into more users. Polymarket positioned itself on the wrong side of the flywheel.

The second factor is distribution. Kalshi established a B2B2C model, integrating its order book into brokerage platforms, fintech applications, and partnerships, rather than relying on direct user acquisition. Polymarket only does DTC, requiring each active trader to bear the full marketing cost. Crucially, Kalshi operates legally under CFTC regulations within the US, whereas Polymarket—following a settlement with the same agency in 2022—is fully geo-blocked for US users. The largest English-speaking prediction market audience cannot structurally access on-chain products. Kalshi does not just outperform in execution; it has a market that Polymarket is legally prohibited from entering.

The implications for evaluating prediction market projects are very specific. The right due diligence questions are: (1) How frequent is participation in the chosen category?; (2) Does the project have a B2B2C distribution path, or does it rely on direct customer acquisition?; (3) What is the regulatory stance within the maximum addressable market? The level of decentralization is largely irrelevant to the outcomes. Polymarket losing 25 to 1 is a result of choosing the wrong category, the wrong distribution model, and the wrong jurisdiction—in that order of importance.

Conclusions of this Chapter

The speculative sector has two key points: (1) Categories that have already produced winners have truly produced winners, and capital should no longer be poured there; (2) The mechanisms of winner emergence are not decentralization, UX, or token economics—perpetuals rely on liquidity concentration, while prediction markets rely on category choice and distribution. Both conclusions point towards the DeFi mullet thesis: the most defensible consumer-facing positioning lies in wrapping a compliance front end around a crypto-native back end. Ether.fi Cash is the cleanest example today. CrediFi and next-generation adjacent payment products fall under the same model.

Stablecoin Infrastructure: Tron is the Most Important Consumer-level Public Chain, Yet No One Talks About It

Common perception: Ethereum L2s and Solana are the major consumer-level public chains, while Tron is an old network primarily used for cheap transfers.

Data shows: Tron has monthly stablecoin transaction volumes exceeding $600 billion—comparable to Visa—with 14.3 million MAUs, 72.8 million USDT holders, and a stablecoin velocity of 0.2-0.3x—demonstrating that its activity is payment-based rather than speculative. It has a complete set of unmarked protocols within a shadow economy, completely unreported by Western media.

The figures are astonishing. The supply of USDT-TRC20 on Tron is $86.4 billion. Monthly transfer volumes range between $600 billion and $1.35 trillion (the lower bound high confidence—TronScan, TokenTerminal; the upper bound includes circularly counted volumes). On March 29, 2026, a single day saw transfer volumes reach $44.9 billion. The network processes over 2 million transactions daily, covering 13.8 million MAUs, with over 80% of transaction volumes estimated to be below $1,000, and 60%-70% below $100. This is a retail payment network, not dominated by whales.

Velocity metrics are a key analytical signal. Tron’s USDT velocity of 0.2-0.3x means that, on average, each dollar of USDT on Tron circulates roughly once every 3 to 5 months. In contrast, speculative public chains can exceed 10x speed—in rapid cycles between DeFi protocols, leveraged positions, and Launchpads. Tron’s stable, slow velocity is characteristic of payment tracks: money comes in for a real-world transaction, stays in the wallet waiting for the next bill or remittance. The top ten USDT holders on Tron control only 8.7% of the supply—indicating wide retail distribution and decentralization.

Next is the shadow economy. Our audit of TronScan identified several unmarked protocols that generate significant revenue but have no documentation in English:

CatFee generates daily fees of $82,000. No one in Western crypto media knows what it is. TRONSAVE has monthly revenue of $863,000, and the identities of all parties are unknown. These protocols operate within the shadow economies of Vietnam's P2P networks, Nigeria's OTC desks, Philippine remittance corridors, and Latin American cash pathways. We estimate that tens of billions of dollars flow through these unmarked clearinghouses daily—dynamic addresses, collections, and freelance payment infrastructures, effectively serving as a banking system for those shut out of traditional finance.

Celo is the fastest-growing public chain in this category, completely driven by MiniPay’s integration with Tether. Its unique user count grew 506% year-on-year, with a total of 12.6 million wallets, and a transaction volume of $15.3 million by December 2025 (high confidence). However, its scale is still just a fraction of Tron’s.

Ethereum remains the platform for institutional settlement—its high fees limit retail use. Solana's stablecoin activity is dominated by trading and Launchpad traffic (pump.fun, Jupiter, Meteora), not payment. The BNB Chain supports monthly stablecoin transaction volumes of $60 billion, primarily for CEX settlements. TON is an unknown variable—Telegram’s wallet integration has brought a significant number of registrations, but participation depth remains unclear.

Synthesis: The Lifecycle of Regulatory Arbitrage and the DeFi Mullet

Every successful consumer-level crypto category in this census has gone through the same arc. It starts with regulatory arbitrage; accumulates capital and users in the gray area; undergoes—or fails to withstand—a regulatory forcing event; and those that break through become legitimate financial infrastructure. Today, protocols and companies generating real revenue exist at different stages of this lifecycle, and their positions determine the risk-return curve of investments.

Stage 1—Gray Area Startup. A protocol or service emerges that solves problems traditional finance refuses or cannot serve, almost always due to some regulatory constraint. The user base is small, highly technical, able to tolerate legal ambiguity. Profit margins are extremely high as regulatory risks are priced into the commission. Tail risks are unlimited. Today's examples: unmarked shadow clearinghouses on Tron (CatFee, TRONSAVE), Nigeria’s P2P USDT desks, and early pump.fun, NFTs, even early Hyperliquid.

Stage 2—User and Capital Accumulation. PMF becomes undeniable. Transaction volumes grow, and users start to come from beyond the core tech circle. Western media begins to take notice, but regulators have yet to act. The USDT economy on Tron exists in this stage today—14.3 million MAUs, monthly transaction volumes exceeding $600 billion. Pump.fun in 2024, Polymarket during the 2024 election cycle, and the current Hyperliquid are also in this stage.

Stage 3—Compliance Transition. A forcing event—lawsuits, enforcement actions, settlements, or proactive regulatory engagement—compels projects to choose between legitimization, fragmentation, or death. This stage has the highest variance, and is the most analytically valuable from an investment perspective. Polymarket's 2022 settlement with the CFTC, pump.fun's $500 million lawsuit, and any future enforcement actions against offshore perpetual venues fall here. Most projects cannot fully traverse this stage.

Stage 4—Legitimate Economy. Those that make it through become durable, auditable, and financeable. Returns compress, as businesses are now valued at fintech multiples rather than moonshot valuations. Kalshi (CFTC regulated, $22 billion valuation), Exodus (NYSE US listing, SEC filing), Circle (S-1 disclosure), and RedotPay (fintech comparable multiples financing) are located here.

With the arc laid out, the timing of investments becomes concrete. Stage 1 has the largest upside potential, but is essentially uninvestable for institutional capital—the underlying business could be rendered worthless by a single enforcement letter; underwriting simply cannot be done. Stage 4 is fully priced; multiples are those of fintechs, and asymmetries have disappeared. Stage 2 has historically been the stage with the best VC returns in this sector, provided there is a credible path to cross Stage 3. The due diligence question for Stage 2 is no longer “Has the product achieved PMF?”—Stage 2 has clearly achieved PMF. The question is whether the business model can survive under compliance.

Tron's shadow protocols will not pass this test, as their very existence is predicated on evasion. Once Vietnam implements KYC on Tron USDT liquidity, CatFee's daily fees of $82,000 will immediately vanish—users are not paying for utility, but for “not having an identity.” There is no compliant business model beneath it. This is the fundamental distinction between protocols with “PMF” and those relying solely on regulatory arbitrage. Both can generate revenue, but only one is investable.

The DeFi mullet thesis emerges directly from this framework. Products like Ether.fi Cash and the next generation of Latin American fintech win precisely because they wrap a layer of compliance around the crypto-native back end. Users do not see or care what chain it is. What regulators see is a normal fintech company. What protocols capture is the economics of the “cheapest rails.” None of these projects has issued tokens—this in itself is a signal: value capture occurs at the equity layer, not the token layer, and the institutional investors who win in this cycle will be those holding equity positions rather than token shares.

The three structural opportunities repeatedly surfacing throughout this brief emerge directly from this synthesis: monetization infrastructure in emerging markets (users are already present, revenue has not yet materialized); cross-border B2B and freelancer payment e-commerce tracks (the parts of the e-commerce gap that can survive); and the still-overlooked, lifecycle stage 2 ecosystem of adjacent protocols on Tron. All three are best suited for entry through the DeFi mullet model; all three reward category choice over decentralization purity; and all three are currently undervalued because Western capital is still looking at the wrong dashboards.

Data Quality Appendix

All data in this report is accompanied by one of the following three confidence ratings:

High—multiple independent sources, verifiable on-chain, or regulatory filings (e.g., Exodus SEC 8-K, TokenTerminal daily verification, Tether/Opera joint disclosure)

Medium—single credible source, or company self-reported with partial independent verification (e.g., Travala self-reported revenue, Coins.ph Latka estimate)

Low—press releases, unverified claims, or Growjo-level estimates (e.g., Telegram 150 million registered, UQUID 220 million users, Bitget 90 million users)

IOSG Ventures | Q1 2026 | Data from TokenTerminal, DeFiLlama, TronScan, Dune, SEC filings, Sensor Tower, and direct disclosures from companies. Unless otherwise noted, all data is as of March 2026.

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