Crypto apps are starting to earn more than the chains they are built on. Pumpfun generated 724M in revenue this past year and Hyperliquid generated 667M. Meanwhile Solana, one of the most conservatively valued major L1s, generated 1.3 billion in annual revenue and 632M in fees. Both apps use nearly all their revenues for token buybacks with transparent cash flows while trading at far lower valuations. The old framework assumed chains would capture value proportional to activity on top of them, but the actual economics are accruing elsewhere. The L1 premium could keep eroding until chains can figure out how to internalize more of the value flowing through their ecosystems. White labeled stablecoins may be one way to retain some of this value.(Delphi Digital)