The crypto market shifts from narrative-driven to cash flow oriented.

In early 2025, as liquidity in the secondary market tightened, many small encryption currency bubbles that relied on "concept + airdrop" as selling points were burst. A large number of altcoins continued to decline, constantly setting new lows. Meanwhile, Bitcoin's market cap share rose to a five-year high of 62.1%, while the altcoin index even fell to a historical low of 4 points in May 2023.

However, some tokens with practical application value have risen against the trend, with both price and on-chain income increasing. The common characteristics of these tokens are: they have real, auditable protocol cash flows, and they return value to holders through buybacks, profit sharing, or staking.

This article will analyze the flow logic of investment funds after the venture capital bubble bursts, and take four typical projects as examples to explore how the "chain listing price-earnings ratio era" reshapes the valuation system of crypto assets.

Market Background: Narrative Retreat, Cash Flow Becomes a Scarce Commodity

• Venture capital cools down: In the second quarter of 2025, global crypto financing dropped sharply to $4.99 billion, a further decline of 21% quarter-on-quarter, marking a new low for a single quarter since 2020, as investors become more cautious about concept speculation.
• Capital is flowing back to quality decentralized finance projects: Bitcoin continues to strengthen and dominates the market, but there is significant differentiation within the decentralized finance sector; protocols with a "revenue-distribution" closed loop have seen their total locked value and trading volume continuously rise. The total locked value of a certain yield tokenization protocol exceeded $5.59 billion in July, a nearly threefold increase within the year.
• Valuation anchor shift: In traditional risk-off cycles, investors are more inclined to pay for quantifiable cash flows rather than purely conceptual premiums.

What is a "Utility Token"?

Definition: Token holders can share the protocol's revenue or indirectly enhance the "on-chain earnings per share" (verifiable earnings corresponding to each token) through buybacks/burns and staking rewards.

Typical pattern:

1. Transaction profit sharing: Return or repurchase the protocol fee proportionally.
2. Lending interest spread and settlement fees: Include the interest spread and settlement rewards in the treasury for repurchase.
3. Tokenization of yield: Splitting future earnings for trading, with protocol fees.
4. Infrastructure Fuel: High-frequency matching engine fees are repurchased and destroyed immediately.

Overview of Four Major Cases

1. A token of a decentralized exchange:

   • Year-to-date increase: 127% (from $4.55 to $10.33)
   • Value Reflow Mechanism: Fee conversion restart proposal, aiming to return 0.05% transaction fees to the treasury (not implemented)
   • Key Catalyst: Foundation through $165.5 million massive investment plan

2. Certain lending protocol token:

   • Year-to-date increase: 157% (from $114.05 to $293.33)
   • Value Reflow Mechanism: Buy back $1 million worth of tokens weekly and enter the ecological reserve.
   • Key catalyst: Buyback plan passed in June

3. Some yield tokenization protocol token:

   • Year-to-date increase: 148% (from $1.81 to $4.49)
   • Value Reflow Mechanism: Protocol takes 5% profit + 5 basis points transaction fee
   • Key catalyst: Total locked value exceeds $5.5 billion, certain token annualized yield of 11.11%

4. Token of a high-frequency trading platform:

   • Year-to-date increase: 376% ($9.3 to $44.3)
   • Value Reflow Mechanism: 30% transaction fees are repurchased and destroyed in real-time.
   • Key Catalyst: Core Trading System Upgrade on July 5

How does cash flow drive valuation recovery?

1. A decentralized exchange:

   • Previously regarded as a "pure governance token"
   • The foundation allocates funds through a $165.5 million investment plan for developer programs, core contributors, validators, team expansion, governance tool development, and liquidity incentives.
   • Currently, the token has no actual value capture or buyback plan.

2. A certain lending agreement:

   • Approve the weekly buyback of approximately $1 million tokens with protocol surplus, and lock them in the treasury.
   • The first week execution drove an intraday increase of 13%, with trading volume doubling.
   • The lending interest spread and settlement fees provide stable cash flow, coupled with a 32% annual increase in the total locked value of the new version, making the buyback plan equipped with long-term ammunition.

3. A certain yield tokenization protocol:

   • Implement the concept of "future earnings" in the trading market
   • Extract 5% profit + 5 basis points trading fee, resulting in auditable daily income
   • High-yield strategies (such as a certain token's yield exceeding 11% at one point) are more attractive in a low-interest-rate environment, with continuous inflows of capital.

4. A high-frequency trading platform:

   • Launching the pre-compilation feature in July, allowing smart contracts to place orders, settle, and call the central limit order book directly.
   • During the week of the upgrade, both the active addresses on the chain and the transaction volume reached historical highs.
   • The immediacy of value flow + the scale of high-frequency trading fees make this token a strong representative of the "on-chain cash flow" concept.

Three Major Advantages of Navigating a Bear Market

1. Deterministic cash flow: On-chain income and expenses are auditable, governance decisions are transparent, reducing information asymmetry.
2. Buyback/Profit Sharing Closed Loop: Write the path of "converting agreement income into token value" into the smart contract, forming an effect similar to stock buybacks or dividends.
3. Institutional friendly: Quantifiable return indicators (price-to-sales ratio, price-to-earnings ratio) reduce valuation uncertainty, facilitating market making and designing structured products.

Summary

After the wave of venture capital has receded, the market is reassessing the value of "verifiable cash flow". Utility tokens integrate on-chain revenue, token value, and governance rights, making them a scarce asset that spans cycles. As mainstream decentralized finance protocols gradually introduce fee conversion, buyback, or surplus distribution mechanisms, it marks a potential shift in the valuation logic of the crypto market from "concept-driven" to "cash flow-driven".