Bitwise CIO says crypto tokens are entering a revenue driven era

Bitwise Chief Investment Officer Matt Hougan said crypto is moving toward a market where revenue plays a much larger role in determining token valuations.

In a memo titled “Crypto’s Revenue Revolution,” Hougan argued that one of crypto’s longstanding weaknesses has been the limited connection between successful protocols and the value captured by their tokens.

He said that dynamic is beginning to change as more projects use protocol revenue to buy back or burn their native tokens, creating a clearer link between network activity and token economics.

Hougan highlighted Hyperliquid as one of the clearest examples. The decentralized exchange generated more than $800 million in revenue last year and directs roughly 99% of fee revenue toward buying HYPE on the open market. According to Hougan, about $1.3 billion worth of HYPE has been bought and burned since the token launched.

Other major protocols are adopting similar models. Uniswap activated protocol fees following its UNIfication proposal and is using revenue to buy and burn UNI, while Aave has introduced automated AAVE buybacks funded by protocol and GHO stablecoin revenue.

Hougan also pointed to Pump.fun and Lighter as projects directing substantial portions of revenue toward token repurchases and burns.

The trend is beginning to extend beyond DeFi applications. Hougan noted proposals and changes at networks including Solana and Aptos aimed at increasing token burns or improving the economics flowing back to holders.

Hougan said investors have yet to fully price in the shift, which is one reason he believes many crypto assets currently trade below their potential value.

Disclosure: This article was edited by Estefano Gomez. For more information on how we create and review content, see our Editorial Policy.