Bitwise Chief Investment Officer Matt Hougan said on Wednesday that crypto valuations could at least double as protocols increasingly use revenue to fund token buybacks and burns. Hougan attributed this potential shift to protocols linking network activity directly to native-token value through revenue-capture mechanisms. The analysis comes as decentralized finance protocols and layer-1 networks adopt fee-based buyback programs, with Hougan noting that investors have not yet priced in this structural change to crypto markets.
Hougan pointed to Hyperliquid, Uniswap, Aave, Pump.fun and Lighter as protocols that use fees to repurchase or remove tokens from circulation. He said crypto outside of Bitcoin is becoming a revenue-driven market in which network activity feeds into native-token value. Hougan said he expects decentralized finance 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. He added that token holders lack shareholders' legal claims to cash flow and that community-set tokenomics can change.
Hyperliquid Directs $141 Million Toward HYPE Buybacks in Q2
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 Activated Protocol Fee Mechanism on Dec. 22, 2025
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 the mechanism, collected fees can be claimed by burning UNI, linking protocol activity to reductions in the token's supply.
Aave DAO Purchased Over 205,000 AAVE in First 10 Months
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.
Regulatory Environment Shift Enables Revenue-Sharing Features
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.
FAQ
What did Bitwise CIO Matt Hougan say about crypto valuations on Wednesday?
Matt Hougan said on Wednesday that crypto valuations could at least double as protocols increasingly use revenue to fund token buybacks and burns. He stated that investors have not priced in this change, leaving some crypto assets undervalued.
How much revenue did Hyperliquid report in Q2 and allocate to buybacks?
On Aug. 6, Hyperliquid reported $169 million in second-quarter revenue and directed $141 million toward HYPE buybacks. The decentralized exchange generated over $800 million in revenue last year and uses about 99% of revenue to buy and burn HYPE.
When did Uniswap activate its protocol fee mechanism?
Uniswap activated 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.
