Crypto valuations could double as protocols link revenue to tokens: Bitwise CIO

Crypto valuations could at least double as protocols increasingly use revenue to fund token buybacks and burns, according to Bitwise Chief Investment Officer Matt Hougan. 

On Wednesday, Hougan said crypto outside of Bitcoin is becoming a revenue-driven market in which network activity feeds into native-token value. He said investors have not priced in that change, leaving some crypto assets undervalued.

Hougan pointed to Hyperliquid, Uniswap, Aave, Pump.fun and Lighter, protocols that use fees to repurchase or remove tokens from circulation. He said he expects decentralized finance (DeFi) applications and layer-1 networks to adopt similar revenue-capture mechanisms over the next 12 to 24 months. 

Stronger links between protocol revenue and token value could give investors conventional valuation metrics, Hougan said, adding that token holders lack shareholders’ legal claims to cash flow and that community-set tokenomics can change.

DeFi protocols turn fees into token demand

Hyperliquid, the decentralized exchange that generated over $800 million in revenue last year, uses about 99% of this to buy and burn HYPE. On Aug. 6, Hyperliquid reported $169 million in second-quarter revenue and directed $141 million toward HYPE buybacks.

Uniswap also linked revenue to its token after its “UNIfication” overhaul approved the activation of protocol fees to fund UNI burns on Dec.22, 2025. Under the mechanism, collected fees can be claimed by burning UNI, linking protocol activity to reductions in the token’s supply.

Related: Uniswap founder rejects claims v4 fees reduce LP earnings

Meanwhile, Aave DAO’s buyback program purchased more than 205,000 AAVE during its first 10 months. On June 25, Aave founder Stani Kulechov said the team was designing an automated, non-discretionary buyback mechanism. 

“100% of Aave Protocol and GHO revenue goes to the $AAVE  token. This was established in the Aave Will Win proposal,” Kulechov wrote. 

Hougan attributed the shift to a more permissive regulatory environment in the US after years in which projects avoided revenue-sharing features over securities-law concerns. On Aug. 5, he said that regulatory guidance could allow crypto to keep expanding even without the CLARITY Act. 

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