Major crypto protocols are adopting revenue-driven models, using token buybacks and burns to return value to holders. This shift could reshape how investors assess token valuations and protocol economics.
Crypto protocols are increasingly adopting business models that tie token value to actual revenue, a shift that could have significant implications for how digital assets are priced and evaluated. According to Bitwise CIO Matt Hougan, many tokens remain underpriced because the market has not fully adjusted to the new ways protocols are distributing revenue to holders. While Hougan did not specify a timeline, he argued that if the market begins to price in these changes, token valuations could rise substantially.
Protocols Embrace Buybacks and Burns
In the past, most blockchain networks generated economic activity without directly returning value to token holders. That dynamic is changing as decentralized finance (DeFi) protocols and layer-1 blockchains implement mechanisms such as token buybacks and burns. Hyperliquid, for example, reportedly generated over $800 million in revenue last year and used about 99% of its fee income to buy and burn its native HYPE token. Since its launch in November 2024, Hyperliquid has bought and burned $1.3 billion worth of HYPE, according to Bitwise. Other protocols are following similar paths: Uniswap generates around $100 million in annual revenue, Aave targets $30 million in annual token burns (about 20% of its revenue), Pump(dot)fun has burned $370 million worth of PUMP through April 2026, and Lighter has repurchased roughly 6% of its circulating supply while generating $67 million in annual revenue.
Layer-1 Networks Join the Trend
This revenue-driven approach is also spreading to layer-1 blockchains. On Solana, a proposal known as SGP-0003 would increase the network's fee burn rate by up to 14 times if approved. Aptos raised its gas fees tenfold earlier this year, which was followed by a near tripling of transaction activity and a jump in annual token burns from about 90,000 APT to 1.9 million APT. These changes reflect a broader industry movement toward aligning token value with protocol revenue, rather than relying solely on speculative demand or network activity.
Regulatory Shifts and Market Impact
Regulatory developments in the United States are also influencing how protocols approach revenue sharing. Hougan points to the U.S. Securities and Exchange Commission's July 2023 court loss in its case against Ripple and the subsequent resolution in August 2025, as well as the appointment of Paul Atkins as SEC chair, as factors that have reduced legal uncertainty for protocols seeking to implement revenue-sharing structures. This evolving regulatory environment may encourage more projects to adopt models that return value to token holders, though the long-term effects remain to be seen.
For context, the move toward revenue-driven tokenomics is part of a broader trend in crypto education and user onboarding. Projects like TUT, which introduced an AI-powered agent to guide users through blockchain basics and DeFi concepts, are also working to make these complex mechanisms more accessible to newcomers. For more on how educational tools are shaping user understanding of DeFi and token models, see this recent coverage of AI-driven blockchain learning initiatives.
Based on available data, Hyperliquid's $1.3 billion in token buybacks and burns since November 2024 represents one of the largest such programs in the sector. Uniswap's $100 million in annual revenue and Aave's $30 million in targeted annual burns highlight the scale at which major DeFi protocols are now returning value to token holders. Pump(dot)fun's $370 million in token burns through April 2026 and Lighter's 6% supply repurchase further illustrate the growing adoption of these mechanisms across the industry.
As more protocols and networks adopt revenue-sharing models, the relationship between protocol usage, fee generation, and token value is likely to become a central focus for both investors and developers. The extent to which these mechanisms drive sustainable demand and long-term value for token holders will depend on factors such as protocol adoption, fee structure, governance, and ongoing regulatory developments in key markets.
