ARK Invest’s director of digital assets research, Lorenzo Valente, said on July 28 that crypto is entering its deepest consolidation phase, with revenue and investment flowing toward fewer businesses.
Summary
- Hyperliquid and Pump.fun generate 67% of application revenue, according to ARK researcher Lorenzo Valente’s analysis.
- ARK’s Q1 report recorded application revenue falling 23% quarter-over-quarter to approximately $485 million across protocols.
- Storj’s Chapter 11 filing and BitMEX’s shutdown provide recent evidence of accelerating industry consolidation pressures.
He said Hyperliquid and Pump.fun account for 67% of application revenue and that adding Ethena lifts the top-three share to almost 80%.
Valente expects more mergers and acquisitions, Chapter 11 filings, shutdowns and talent-focused acquisitions in the coming months. He also claimed revenue concentration had reached record levels across applications, middleware and Layer 1 networks. However, his post did not identify the dataset, category definitions or measurement period behind those figures.
ARK Invest data shows application revenue concentrating
ARK’s Q1 2026 DeFi report provides earlier evidence of concentration, although its figures differ from Valente’s newer post. The report said total application revenue fell about 23% quarter-over-quarter to approximately $485 million. Hyperliquid generated about $145 million, Pump.fun produced $123 million and Axiom earned $58 million during the quarter.
Those three applications, not Hyperliquid and Pump.fun alone, accounted for roughly 67% of tracked application revenue through March 31. The difference does not necessarily contradict Valente’s July figures because he may have used a newer period or another classification. It does mean the 67% and 80% shares should remain attributed to his analysis rather than presented as independently confirmed measurements.
Current public dashboards also show why methodology matters. DefiLlama records $37.46 million in 30-day protocol revenue for Hyperliquid and $20.32 million for Pump.fun. For Ethena, it records $14.41 million in fees but only about $42,365 in retained protocol revenue after costs. Gross revenue, fees and revenue retained by a protocol are not interchangeable measures.
Recent bankruptcies and closures support the warning
Storj Labs filed voluntary Chapter 11 proceedings on July 26 in the U.S. Bankruptcy Court for the Northern District of West Virginia under case 5:26-bk-00512. Storj said it plans to keep its storage network operating while addressing legacy obligations under court supervision.
Separately, BitMEX said it will close its exchange on Sept. 23 after parent HDR Global Trading completed a strategic review. BitMart’s official wind-down notice stopped new registrations and deposits from July 26. BitMart plans to end trading on Aug. 26 and cease platform operations on Jan. 31, 2027.
RootData’s 2026 dead-project archive lists 99 projects that announced closures, entered bankruptcy or remained unavailable for extended periods. That total provides wider context but should not be described as 99 insolvencies because the database combines several types of failure and inactivity.
As previously reported, ZeroLend also announced a shutdown in February after citing sustainability, liquidity and operating risks. Together, these cases show that closures are occurring across centralised exchanges, lending protocols and infrastructure businesses rather than within one market segment.
Crypto M&A is targeting established infrastructure
Consolidation is also occurring through acquisitions. Payward, Kraken’s parent company, agreed on July 27 to acquire Magic Labs’ wallet-as-a-service business. The acquired infrastructure has supported more than 60 million wallets, over $10 billion in stablecoin volume and about 200,000 developers, according to the company release.
The transaction will add embedded, non-custodial wallets to Payward Services. Financial terms were not disclosed, and the parties expect closing within weeks, subject to customary conditions. As crypto.news reported, the deal gives Payward an established wallet stack and developer base rather than requiring the group to build both internally.
In related coverage, Pump.fun’s revenue and volume remained below 2025 levels despite product and fee-policy changes. That contrast fits Valente’s wider argument: a project can remain among the sector’s largest earners while facing weaker activity than during an earlier peak.
What happens next in the consolidation cycle?
The next confirmed milestones will come from corporate deadlines and court records. BitMEX users must close positions and withdraw assets before the Sept. 23 shutdown. BitMart users face the Aug. 26 trading cutoff, while Storj’s restructuring will proceed through court motions, creditor claims and any required approvals.
Payward’s Magic Labs transaction is expected to close within weeks. Valente did not give a numerical forecast for future deals, bankruptcies or shutdowns, and his post did not link to a separate ARK timetable. The expectation that consolidation will accelerate therefore remains a forward-looking assessment supported by recent cases, not a confirmed outcome.
