Bitwise CIO Says Crypto Valuations May Double With Revenue-Linked Tokens

Bitwise’s Matt Hougan expects revenue-capture mechanisms to become more widely adopted across DeFi applications and layer-1 networks over the next 12 to 24 months.

Crypto valuations could at least double as protocols increasingly use generated revenue to fund token buybacks and burns, according to Bitwise Chief Investment Officer Matt Hougan.

On Wednesday, Hougan said the crypto market beyond Bitcoin is increasingly becoming revenue-driven, with network activity contributing directly to the value of native tokens. He added that investors have yet to fully price in this shift, leaving some crypto assets potentially undervalued.

Hougan highlighted Hyperliquid, Uniswap, Aave, Pump.fun and Lighter as protocols that use fee revenue to repurchase tokens or remove them from circulation. He expects similar revenue-capture models to be adopted by DeFi applications and layer-1 networks over the next 12 to 24 months.

Hougan said stronger connections between protocol revenue and token value could provide investors with more traditional valuation metrics, while noting that token holders do not have the legal claims to cash flow that shareholders possess and that community-driven tokenomics can still be changed.

DeFi Protocols Convert Fees Into Token Demand#

Hyperliquid, the decentralized exchange that generated more than $800 million in revenue last year, allocates roughly 99% of that income to HYPE buybacks and burns. On Aug. 6, Hyperliquid reported $169 million in second-quarter revenue and directed $141 million toward HYPE repurchases.

Uniswap also connected protocol revenue to its token after the “UNIfication” overhaul approved the activation of fees to fund UNI burns on Dec. 22, 2025. Under the mechanism, collected fees can be claimed through UNI burns, linking network activity to a reduction in the token’s overall supply.

Meanwhile, Aave DAO’s buyback program acquired more than 205,000 AAVE during its first 10 months. On June 25, Aave founder Stani Kulechov said the team was working on an automated, non-discretionary mechanism for future buybacks.

“100% of Aave Protocol and GHO revenue goes to the $AAVE token. This was established in the Aave Will Win proposal,” Kulechov wrote.

Hougan attributed the shift to a more favorable regulatory environment in the US, following years when projects avoided revenue-sharing features because of securities-law concerns. On Aug. 5, he said regulatory guidance could enable the crypto sector to continue expanding even without passage of the CLARITY Act.