The Approach to Cryptocurrency Valuation Has Changed. Which Ones Will Rise and Why

The crypto market is entering a new phase, where the value of many digital assets will increasingly be determined not by expectations but by the actual revenues of projects, writes Matt Hougan, Chief Investment Officer at Bitwise, in a note to investors. In his opinion, the market is currently underestimating these changes, which is why some tokens are trading below their fair value.

As Hougan writes, one of the main criticisms of cryptocurrencies for a long time has been the lack of a clear connection between the success of blockchain projects and the value of their tokens. Many projects attracted millions of users and generated billion-dollar revenues, but token holders did not participate in the distribution of this revenue.

Now, Bitcoin is likely to remain primarily a monetary asset, while the value of other crypto assets will increasingly be determined by the financial results of the projects behind them, much like the value of traditional company stocks.

Projects have become more active in directing a significant portion of their revenues to benefit token holders. For instance, Hyperliquid generated over $800 million in revenue last year and directed about 99% of these funds towards the buyback and reduction of the supply (burning) of HYPE tokens, similar to stock buyback programs. According to Hougan, a similar model is gradually being adopted by Uniswap, Aave, Solana, and other projects.

According to Hougan, the position of the U.S. Securities and Exchange Commission (SEC) had long hindered this. The regulator equated the distribution of revenues to token holders with signs of illegal securities offerings. Therefore, most projects, including Uniswap and Aave, issued so-called governance tokens, which formally gave holders voting rights but not rights to income.

The situation changed after a key market victory in court for Ripple over the SEC in 2023, when the court limited the application of securities laws to crypto tokens. Then, after Paul Atkins took over the SEC, the regulator adopted a more favorable position towards the crypto business. This reopened the opportunity for projects to distribute a portion of revenues among token holders.

The Phenomenon of Hyperliquid
At the end of 2024, the trading platform Hyperliquid was fully launched, releasing its own token HYPE. Since then, its price has increased by almost 800%, and the token entered the top 10 largest crypto assets even without being listed on major exchanges, while Bitcoin has decreased in value by about a third during the same period.

One of the main reasons, according to Hougan, is precisely the revenue distribution model. About 99% of the revenue from trading fees at Hyperliquid is directed towards the buyback and burning of HYPE tokens. Since its launch, around $1.3 billion has been spent on this by the summer of 2026, which reduced the token supply and supported its price.

In Hougan's opinion, this model has made Hyperliquid one of the most discussed projects in the crypto market. Following it, similar mechanisms have begun to be implemented by other projects.

Uniswap (UNI)
In December 2025, the Uniswap community almost unanimously approved the UNIfication proposal. After that, the protocol burned 100 million UNI tokens, or 10% of their maximum supply, worth about $590 million, and also included revenue distribution for the first time. Since then, another 7 million UNI have been burned. The annual revenue of the protocol in August 2026 is about $100 million, and it is entirely directed towards the buyback and burning of tokens.

Aave (AAVE)
Since April 2025, Aave has begun conducting weekly buybacks of AAVE tokens using protocol revenues. Currently, about $30 million per year, or approximately 20% of annual revenue, is directed towards these purposes. In June 2026, Aave launched the Aavenomics 3.0 program, which automatically uses protocol revenues and the GHO stablecoin for token buybacks. By August 2026, more than 1.2% of the total AAVE supply had been bought back.

Pump.fun (PUMP)
The most aggressive model was chosen by the meme coin launch service Pump.fun. Just a few days after the launch of the PUMP token in July 2025, the project began buying it back, and by April 2026, it had burned tokens worth $370 million, corresponding to 36% of their circulation. Additionally, 50% of the net profit for the following year was directed into an irreversible smart contract for automatic buyback and burning of tokens. The annual revenue of the platform is estimated at $328 million.

Lighter (LIT)
Lighter, another trading blockchain platform and a main competitor to Hyperliquid, has been directing a portion of its revenue from fees towards the buyback of the LIT token with subsequent burning since its launch in early 2026. From the beginning to mid-2026, the project has already bought back about 6% of the circulating tokens. The annual revenue of the platform is about $67 million.

According to Hougan, the trend is also spreading to Layer 1 blockchains. For example, Solana developers presented a proposal that includes reducing the inflation of the SOL token and increasing the volume of burned fees by almost 14 times.

A similar step was previously taken by the Aptos blockchain, which increased transaction fees tenfold. Despite this, user activity did not decline but nearly tripled. As a result, the annual token burning volume of APT increased from about 90,000 to 1.9 million.

Undervalued Tokens
Hougan compares the current stage of the crypto market's development to internet companies in the early 2000s. At that time, investors doubted that platforms could start earning without losing audience. However, after launching advertising, their profits grew, and users did not leave. According to the author, a similar process is currently happening in the crypto industry.

In his assessment, in the next 1-2 years, DeFi projects and Layer 1 blockchains will direct an increasing portion of their revenues to support the value of their tokens. Meanwhile, the market, according to Hougan, is still underestimating such projects.

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