REV: A new approach to blockchain revenues, but is it relevant?

What is REV?

Introduction to REV

REV (or Real Economic Value) is a standard for calculating a protocol's revenue, accounting not only for base transaction fees but also additional tips, particularly those paid to validators. Its goal is to more accurately reflect the real monetary demand for a protocol's blockspace.

Introduced by the research team at Blockworks Research and popularized on X by analysts like Dan Smith, the concept of REV emerged in late 2024 as a new metric to evaluate blockchain revenues. Quickly adopted, it sparked both enthusiasm and controversy.

REV, as introduced by Blockworks Research, primarily applied to the Solana blockchain. In this specific case, it refers to three types of fees:

• Base fees: required to execute any transaction.
• Priority fees: additional protocol-integrated fees to prioritize a transaction.
• Jito Tips: off-chain tips paid to send a transaction directly to the next block's "leader" validator, often to capture MEV.

REV aggregates these three revenue sources, including Jito tips, to reflect the full monetary value associated with executing a transaction. On Solana, these tips have become an increasingly significant part of the economic activity: they rose from 30% to over 56% of total fees collected in less than a year.

This redefinition of revenue is far from trivial. By expanding what counts as "blockchain revenue," REV challenges traditional rankings and disrupts economic analysis of L1s. In Solana's case, for instance, switching to the REV standard significantly boosts reported revenue—with direct implications for valuation metrics.

Reference to MEV

The name REV is a direct reference to MEV—Maximal Extractable Value—a controversial metric often excluded from net protocol revenue calculations. The goal of REV's creators is to reintegrate this value, seen as an essential component of the economic demand for blockspace.

MEV is an old concept, once known as "Miner Extractable Value" back when Ethereum was still Proof of Work, and its first mention is attributed to Phil Daian in 2019 in his paper Flash Boys 2.0.

Concretely, Maximal Extractable Value refers to the value a validator can extract by reordering transactions within a block. It is controversial because it can take two very different forms:

• Toxic MEV: such as front-running or sandwich attacks, which degrade the user experience by capturing part of the transaction value.
• Useful MEV: such as inter-DEX arbitrage or DeFi liquidations, which improve market efficiency without harming users.

MEV is thus debated: it is both a risk to the user experience (particularly from a financial standpoint) and a key mechanism for ensuring the economic balance of decentralized finance (DeFi) applications.

This is precisely where REV comes into play. By including MEV-related tips (like Jito Tips) in revenue calculations, REV acknowledges that these flows reflect real demand for blockspace—and not externalities to be excluded.

In other words, where MEV was long seen as an anomaly or invisible "tax," REV treats it as a performance indicator. It’s a perspective shift: MEV is no longer an externality to contain, but a legitimate source of revenue for the blockchain.

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Fat Protocol vs Fat App Thesis

Concept

The REV concept is indirectly tied to an older debate: Fat Protocol Thesis vs. Fat App Thesis. These are two opposing views on how value is captured in blockchain ecosystems.

The Fat Protocol Thesis, introduced by Joel Monegro in 2016, assumes that blockchains invert the traditional logic of the Internet’s architecture. On the Web, protocols like TCP/IP serve as the execution layer for all websites, yet have far less value than the applications they support. This is the view of the Fat App Thesis.

In contrast, Joel Monegro believes that thanks to the consensus layer, data transparency, and alignment with a native token, protocols (i.e., L1 blockchains) capture much more revenue and economic value than applications. This is the Fat Protocol Thesis.

In other words, applying the Fat App Thesis to blockchains implies that applications, especially dApps and Rollups, will ultimately capture most of the value, relegating L1s to the role of generic and undifferentiated infrastructure.

Summary:

• Fat Protocol Thesis: L1 blockchains will capture more economic value than their applications (unlike the Internet).
• Fat App Thesis: Applications and Rollups will capture more economic value than their infrastructure (like the Internet).

REV aligns closely with this opposition, as it redefines how L1 revenue is measured—often to the detriment of applications that generate most of that revenue.

Ethereum

Ethereum appears to be gradually aligning with the Fat App Thesis, adopting a roadmap (and architecture) centered on Rollups, which are largely designed to become applications. Thus, the protocol increasingly delegates execution to external layers while positioning itself as a neutral and secure base.

This vision is reinforced by its approach to MEV. For several years, Ethereum has developed tools like PBS (Proposer-Builder Separation) and MEV-Boost to mitigate MEV's negative effects and protect users. The idea is not to capture these revenues at the protocol level but to regulate or even equitably redistribute them.

In other words, Ethereum is deliberately stepping aside in favor of applications and Rollups built on top. Philosophically, its goal is to become the TCP/IP of blockchain: a universal base layer essential for building high-value solutions.

The risk? By letting Rollups capture attention, innovation, and revenue, Ethereum might lose part of its valuation premium compared to other architectures. Nevertheless, this is a trade-off the Ethereum Foundation accepts, as much of the community believes this thesis is crucial for becoming the world’s leading infrastructure.

Solana

Conversely, Solana leans toward the Fat Protocol Thesis by placing its brand at the center of blockchain activity. Its monolithic architecture enables top-tier performance, but more importantly, it allows the protocol to absorb as much MEV as possible and redistribute it to validators and stakers.

Rather than delegating execution, Solana centralizes everything on Layer 1. This approach allows it to directly capture on-chain activity flows, especially MEV tips via Jito. Unlike Ethereum, MEV is not something to be contained (to a degree), but a fully embraced revenue source, distributed to validators and stakers.

This is where the REV concept fits perfectly: it helps (artificially or not—the debate is ongoing) inflate the blockchain's revenue figures. Thus, by showcasing high revenue (especially via tips), Solana positions itself to be valued as a "fat" protocol—even if this means capturing harmful MEV and failing to redistribute value to the applications that generate it.

Logically, not everyone agrees, and some criticize the misalignment between the main blockchain and its applications and users. Token Terminal has recently expanded the debate with Blockworks by proposing a dashboard that includes various metrics to compare Ethereum and Solana.

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Shift Toward the Fat App Thesis

A Reversing Trend

While the vision of a “fat blockchain” may appeal to some, the data shows a different trend: applications are capturing a growing share of revenue. In other words, the Fat App Thesis is gaining traction.

According to a Syncracy Capital study, the share of revenue captured by applications rose from 10% to over 40% in four years, on both Ethereum and Solana—a clear trend reversal.

A striking example: Pump.fun. In just one year, this single application generated nearly $600 million in revenue, at times surpassing Solana’s own daily revenue.

This rise of applications challenges the Fat Protocol model. Even more so as a new type of architecture strengthens this dynamic: App-Specific Sequencers (ASS).

The Threat of App-Specific Sequencers (ASS)

ASS allow an application to regain control over transaction ordering by delegating this function to a dedicated sequencer. These applications are called “sovereign,” meaning they manage execution themselves and no longer depend on the base execution layer (especially monolithic infrastructures like Solana). Moreover, they remain on L1—no bridges or extra layers—unlike L2s.

Why does it matter? Because controlling execution also means capturing the MEV generated by your activity, instead of letting L1 validators take it.

That’s exactly what projects like Sorella Labs aim to achieve. They promote a vision where applications capture the “good” MEV while neutralizing the “bad.” ASS thus become a credible alternative to monolithic blockchains for protecting users while reinforcing the Fat App Thesis.

ASS are therefore a threat to the Fat Protocol Thesis promoted by the REV concept. They enable MEV to be natively redistributed to applications instead of L1 validators as with Jito tips.

Toward Proprietary Architectures

Some applications are going even further by developing their own infrastructure. This is particularly the case with Pump.fun and Jupiter:

• Recently, Pump.fun introduced its own AMM to break away from relying on Raydium and maximize profits. An app focused on its own revenue may be incentivized to use an ASS setup to capture all the MEV it generates, rather than leaving it to validators—undermining the very idea of REV.
• Jupiter has also announced its own Layer 1 called Jupnet, built using SVM with its own execution layer. This will redirect MEV from its activity to Jupiter’s validators instead of Solana’s.

Interoperability and the L1 “Premium”

Interoperability between blockchains is essential for any L1-based ecosystem to easily attract users or liquidity from other chains.

Major strides have been made by projects like Across, Twine, Particle, or Skate, which are working to remove the L1 layer from the user experience. This could come from new communication standards, Chain Abstraction implementation, or simple liquidity hubs.

However, this directly threatens the Fat Protocol Thesis. If interoperability grows to the point where users can interact with any application without caring what L1 it runs on, then all L1s lose their “attention premium”—and potentially part of their market cap.

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Valuation: A Glass Ceiling for L1s?

The implications of REV go beyond simple revenue accounting. By redefining what constitutes “blockchain revenue,” this standard also aims to legitimize higher valuations for L1s—especially those capturing MEV directly, like Solana.

But this strategy raises a fundamental question: how far can the valuation of an infrastructure layer go? Today, L1 blockchains are highly valued, sometimes disconnected from actual revenue. Some reach revenue multiples of 600x or more—compared to 5–20x for an application.

Example: Solana is often compared to Nasdaq. Yet, the company operating Nasdaq is valued at $45B, while traded assets exceed $28T. At its peak, Solana’s market cap surpassed Nasdaq’s—with 10x less volume and far higher infrastructure costs.

This discrepancy highlights a potential glass ceiling for L1s. As revenue shifts toward applications (Pump.fun, Jupiter...) and interoperability renders the infrastructure layer invisible, the valuation premium of L1s may gradually erode.

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Conclusion

REV is an interesting concept because it seeks to better reflect the true economic demand for blockspace—especially by including MEV as a legitimate revenue source. In this sense, it aligns perfectly with the Fat Protocol Thesis: a world where L1s capture the majority of on-chain value.

But this model is increasingly challenged. The rise of sovereign apps, the development of ASS, the emergence of proprietary L1s, and the gradual abstraction of execution layers shift attention (and value) toward applications.

In a world where value follows attention, where users don’t care about the underlying L1, and where applications control more and more execution, REV may turn out to be nothing more than a temporary illusion of protocol valuation.

Blockchains will have to choose: maintain an extractive model and risk losing their apps—or share (or even forfeit) MEV to preserve relevance in tomorrow’s on-chain economy.