- Bitwise CIO Matt Hougan argues crypto valuations could at least double as protocols route revenue into token buybacks and burns.
- Hyperliquid, Uniswap, Aave, and Pump.fun are among the protocols already using fees to repurchase or remove tokens from circulation.
- Hougan says investors have not yet priced in this shift toward revenue-driven tokenomics, leaving some assets undervalued.
- A more permissive U.S. regulatory environment is enabling projects to adopt revenue-sharing features that were previously avoided over securities-law concerns.
Bitwise chief investment officer Matt Hougan said Wednesday that crypto valuations outside of Bitcoin could at least double as protocols increasingly use revenue to fund token buybacks and burns, according to a memo. He argued that the market has not yet priced in this shift toward a revenue-driven model where network activity directly feeds native-token value.
Hougan pointed to Hyperliquid, Uniswap, Aave, Pump.fun, and Lighter as examples of protocols that already use fees to repurchase or remove tokens from circulation. He expects decentralized finance applications and layer-1 networks to adopt similar revenue-capture mechanisms over the next 12 to 24 months.
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 linked revenue to its token after its “UNIfication” overhaul approved the activation of protocol fees to fund UNI burns on Dec. 22, 2025. Under that mechanism, collected fees can be claimed by burning UNI, linking protocol activity to reductions in the token’s supply.
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, writing: “100% of Aave Protocol and GHO revenue goes to the $AAVE token.”
Hougan attributed the broader shift to a more permissive regulatory environment in the U.S. after years in which projects avoided revenue-sharing features over securities-law concerns. He said on Aug. 5 that regulatory guidance could allow crypto to keep expanding even without the CLARITY Act.
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