Crypto valuations could double as protocols link revenue to tokens: Bitwise CIO
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
Bitwise CIO Matt Hougan said crypto valuations could at least double as protocols increasingly link revenue to tokens through buybacks and burns. He highlighted that crypto outside Bitcoin is shifting to a revenue-driven market where network activity supports token value, a change not yet priced in by investors. Hougan cited protocols like Hyperliquid, Uniswap, and Aave that use fees to repurchase or burn tokens and expects more DeFi and layer-1 networks to adopt similar mechanisms in the next 12 to 24 months.
Why it matters
Hougan argued that tying protocol revenue to token value could provide investors with conventional valuation metrics, addressing the current lack of legal claims to cash flow and mutable tokenomics for token holders. This shift could reshape how crypto assets are valued and attract broader investor interest by creating clearer financial links between usage and tokenomics.
Key context
Hyperliquid generated over $800 million in fees last year, using nearly all to buy and burn its native token HYPE, including $141 million in Q2 alone. Uniswap’s “UNIfication” update approved protocol fees to fund UNI token burns starting from December 2025. Aave DAO bought over 205,000 AAVE tokens in the first 10 months of its buyback program, with plans for an automated, non-discretionary buyback mechanism. Hougan attributed the trend to a more permissive US regulatory environment reducing past securities-law concerns over revenue-sharing models.
Key numbers and entities
Organizations and protocols mentioned include Bitwise, Hyperliquid, Uniswap, Aave, Pump.fun, and Lighter. Key figures include $800 million in annual revenue for Hyperliquid, $169 million in Q2 revenue with $141 million directed to buybacks, and Aave’s purchase of over 205,000 AAVE tokens in 10 months. Important individuals cited are Bitwise CIO Matt Hougan and Aave founder Stani Kulechov.
What remains unclear
The source does not flag open questions or limitations but notes that token holders lack legal claims to cash flow and that tokenomics can be community-changed, indicating some uncertainty remains around these evolving mechanisms.