Which assets are worth focusing on in a bear market?

Written by: Ignas | DeFi Research

Edited by: Saoirse, Foresight News

CoinGecko tracks 17,148 tokens.

But in the current crypto market environment, how many truly meet the following criteria for “investable assets”?

• Generate returns for holders;

• Have protocol revenue, even if not yet distributed;

• Have a strong narrative and market recognition, capable of surviving a bear market.

I’m trying to clarify this issue.

Most data comes from DefiLlama, CoinMarketCap, and some protocols reflecting market sentiment (Dexu, Moni, Lunarcrush, etc.).

I processed the data using Claude Code to minimize personal bias ——

I initially excluded certain tokens (like XRP, ADA, BCH, etc.), but they have gone through multiple cycles and maintain ongoing vitality thanks to sufficient liquidity.

Claude still made many errors; debugging took ten times longer than writing the article, so the table data is for reference only (link at the end).

Final results:

• Selected 12 categories, 132 investable tokens;

• 45 of these distribute dividends to holders (excluding those with very low yields);

• Annualized returns to holders: $1.8 billion.

These classifications are entirely based on my subjective judgment of “survivability and future potential,” and you may disagree.

The first key insight: the truly investable crypto market is painfully small.

And the tokens that actually make money for holders are almost monopolized by two projects. Details follow.

It’s amusing that during the process of compiling this list and verifying each token, I reached this conclusion:

After repeatedly contemplating how to approach the crypto space, reviewing old and new tokens, and exploring new narratives, I believe the optimal risk-reward (R/R) strategy in crypto is:

• Directly buy Bitcoin (BTC).

• Use “play money” to experiment with new protocols, while continuously learning to use AI tools.

There will always be new opportunities.

The most worthwhile tokens to invest in: Revenue-Sharing Tokens

The current mainstream narrative is:

• Projects without revenue will eventually die!

Even ETH struggles to escape this “value based on income” narrative.

Therefore, the most valuable tokens are those that can distribute profits to holders via buybacks, burns, fee sharing, etc.

I set the threshold at: DefiLlama 30-day holder earnings ≥ $50,000.

These 45 tokens generate $153 million monthly for holders,

totaling $1.8 billion annually.

Top 10 in revenue sharing:

Note: Revenue sharing ≠ holder earnings on DefiLlama.

For example: EtherFi isn’t on the holder earnings list but has buybacks.

L1 chains like Tron are categorized separately.

After the top five, monthly revenue drops rapidly below $3 million.

If the crypto market continues to treat tokens as stocks,

then P/S (market cap to revenue ratio) will become increasingly important.

Pump.fun: 1.4x

Aerodrome: 3.4x

From traditional finance standards, these are extremely cheap.

At current income rates, the entire market cap could be recouped in less than three years.

Meanwhile:

Uniswap: P/S as high as 121x

Aave: even 341x

Because market valuation far exceeds “current earnings.”

Aave recently started buybacks, but only distributes $412,000 monthly, while protocol monthly revenue is $10 million. Future governance changes could alter this.

Tokens with the lowest P/S (market sales ratio):

• Farcaster’s Clanker: 0.9x

• ORE: 0.9x

• Yield Basis: 0.8x

• Pump.fun: 1.4x

• QuickSwap: 1.4x

All can recover their market cap within three years through earnings.

Most important conclusion:

Hyperliquid + Pump.fun = 69% of all holder returns!

Out of 45 tokens, just two projects contribute over two-thirds of cash flow.

This concentration is worth considering.

Ansem’s tweet nicely summarizes HYPE’s investment philosophy:

HYPE:

• Business is growing steadily, tokens are highly tied to revenue;

• Has diversified growth leverage;

• Existing comparable projects perform well;

• Benefits from a market environment with scarce quality tokens and capital集中于 top projects;

• Strong team execution, steady pace, impressive track record.

Revenue-Generating but Not Yet Distributing Dividends

This group includes 16 tokens, each with protocol revenue ≥ $100,000 per month, with income retained in treasury.

Top projects:

• Lido: $4.3 million/month, TVL $32 billion (proposed staking dividends last year);

• CoW Protocol: $3 million/month;

• Meteora (Solana): $2 million/month;

• Virtuals Protocol: $1.4 million/month;

• Drift: $868,000/month.

A comparison of Lido vs. Ether.fi is interesting:

Lido’s TVL is 10 times higher, revenue 3 times higher, but LDO holders get nothing;

Ether.fi distributes $1.5 million monthly via buybacks.

If you want to survive a bear market, you’d prefer the one that pays you.

Investment logic for these assets:

• These protocols will eventually turn on the “dividend switch.”

Lido has been promising this for years.

Jito’s total monthly fees are $5.3 million, but only $544,000 go into the treasury.

The gap between total fees and holder returns represents opportunity and risk.

Other segments overview

Exchange tokens (7 tokens, total market cap $99 billion, including BNB):

• Profitable in both bull and bear markets. CEX trading volume declines but doesn’t go to zero.

• BNB: $85 billion;

• LEO, OKB: held up well during 2022 and 2024 bear markets.

Many have buyback plans, not reflected in DefiLlama data.

High circulation ratio of CEX tokens further reduces downside risk.

L1 chains (19 tokens, total market cap $1.8 trillion):

• The foundational layer.

• BTC: $1.36 trillion

• ETH: $245 billion

I’ve relaxed standards for XRP, ADA, especially Cosmos, as they have survived multiple cycles, with believers and liquidity, maintaining ongoing vitality.

You might dislike TRX, but it generates $26 million in fees monthly—more than Solana or Ethereum.

Its recent performance is strong; check the charts yourself.

L1 chains won’t disappear, but valuations will fluctuate greatly. Invest at your own risk.

AI and Computing (8 tokens, total market cap $510 million):

• Most have no real revenue, except one:

• Venice (VVV): the only AI token supported by subscription and API revenue, has burned 43% of supply.

• Bittensor: $1.9 billion market cap, 128 subnets, no protocol revenue;

• Render, Akash: sell GPU compute power, cheaper than centralized platforms;

• Grass: provides decentralized data for AI training.

Note: Some unlisted AI tokens are surging now, suitable for short-term trading, but whether they are “investable” is uncertain.

RWA Asset Tokenization (7 tokens, total market cap $13.5 billion):

• Growing quietly; I believe the true RWA bull market has not yet arrived.

• Canton Network controls 88.57% of on-chain RWA, about $372 billion in tokenized assets. But real-world assets are more complex than they seem.

• Chainlink is the key oracle for RWA infrastructure, but LINK staking rewards come from inflation and fixed pools, not protocol revenue sharing.

• Chainlink’s revenue is good, but flows mainly to node operators and treasuries, not directly to holders.

Privacy Tokens (2 tokens, total market cap $9.7 billion):

• High-risk sector: increasingly important with stricter regulation or outright bans.

• But demand remains stable regardless of market conditions.

• Monero: $6.2 billion

• Zcash: $3.6 billion

Meme Coins (6 tokens, total market cap $20.8 billion):

• Classifying them as “investable” may be controversial.

• But like Bitcoin, they survive on community support.

• DOGE: $15.2 billion, over ten years old;

• SHIB, PEPE, BONK, FLOKI, WIF also listed.

• If the market rebounds, they may outperform high-yield tokens.

• No income ceiling, no upper limit.

• Nearly all are highly liquid, with low selling pressure.

Other categories:

• L2 chains (7 tokens, $3.7 billion);

• DePIN (5 tokens, $500 million): decentralized storage, data collection;

• Oracles / Infrastructure (7 tokens, $1.8 billion);

• Stablecoin infrastructure (4 tokens, $1.1 billion): Ethena leading.

Super profitable projects without tokens

Some of the most profitable crypto businesses have no investable tokens at all.

• Tether: annual revenue over $6 billion, more than the combined revenue of the 45 yield tokens, all going to shareholders;

• Polymarket: $3.8 million/month, no token;

• Base: revenue goes to Coinbase shareholders, potential token issuance in future;

• Phantom: millions of users, very high fees;

• Circle: issuer of USDC, benefits from IPO;

• Kalshi: regulated by CFTC, no token;

• Farcaster: acquired, airdrop expected to be significantly reduced, but may still issue tokens.

So, how should you use this information?

The most ideal holdings in a bear market meet four criteria:

• Generate holder income

• Low P/S ratio (market cap / revenue)

• High MC/FDV (circulating market cap / fully diluted valuation)

• Stable ongoing demand

Few tokens meet all four.

Closest options:

• PUMP: 1.4x P/S, 33% MC/FDV

• AERO: 3.4x, 50%

• JUP: 7.3x, 51%

• SKY: 16x, 98%

• CAKE: 15.1x, 96%

Low-risk choices:

• Exchange tokens: LEO, OKB, GT

• Nearly fully circulated, supported by exchange profits and buybacks, most stable in bear markets.

High-risk, high-reward:

• HYPE: leading in yields, but only 25% MC/FDV.

• Coingecko’s new stats exclude long-dormant and burned tokens, dropping to 41%.

Trading opportunities:

• Watch governance changes:

• Bet on projects with revenue but not yet distributing dividends, turn on the “dividend switch.”

• Focus on:

• Lido, Meteora, Drift, CoW Protocol

• Everything else relies on faith.

Do you believe AI computation will go on-chain?

Do you believe RWA tokenization will continue to grow?

I believe so, but are these tokens the right bets?