Bitwise Chief Investment Officer Matt Hougan expects crypto valuations outside Bitcoin to at least double as protocols increasingly route revenue toward token buybacks and burns. In a Wednesday statement, Hougan said a revenue-driven market is emerging within crypto, where network activity directly feeds into native-token value—a shift he believes investors have not yet priced in.
This valuation shift stems from decentralized finance applications and layer-1 networks adopting explicit revenue-capture mechanisms. Hougan anticipates these features will spread across the broader DeFi ecosystem over the next 12 to 24 months. Current examples include Hyperliquid, Uniswap, Aave, Pump.fun and Lighter.
Hyperliquid generated over $800 million in revenue last year, dedicating approximately 99 percent to HYPE token repurchases and burns. On Aug. 6, the decentralized exchange reported $169 million in second-quarter revenue, with $141 million directed toward HYPE buybacks. This mechanism directly reduces circulating supply.
Uniswap integrated a revenue-to-token mechanism through its "UNIfication" overhaul, approved via governance on Dec. 22, 2025. Collected protocol fees can now be claimed by burning UNI tokens, establishing a direct link between protocol activity and token supply reduction.
The Aave DAO purchased more than 205,000 AAVE tokens during the first 10 months of its buyback program. On June 25, Aave founder Stani Kulechov announced his team was developing an automated, non-discretionary buyback mechanism. "One hundred percent of Aave Protocol and GHO revenue goes to the $AAVE token. This was established in the Aave Will Win proposal," Kulechov said.
Hougan noted that stronger links between protocol revenue and token value could provide investors with more conventional valuation metrics. However, he cautioned that token holders lack the legal claims to cash flow that traditional shareholders possess.
Tokenomics governing revenue-sharing mechanisms are community-set and can be altered through decentralized governance. This contrasts with fixed legal structures underpinning equity ownership in traditional finance, introducing distinct protocol risk.
Hougan attributed broader adoption of revenue-sharing features to a more permissive U.S. regulatory environment. For years, many projects avoided implementing such mechanisms due to concerns their tokens might classify as securities. On Aug. 5, Hougan said evolving regulatory guidance could allow continued crypto sector expansion without passage of the CLARITY Act.
