Buyback Bounce: Bitwise CIO Says Tokens Could 2x Once Protocols Eat Their Own Cooking 🍴

Crypto valuations could at least double as protocols increasingly route revenue toward token buybacks and burns, Bitwise chief investment officer Matt Hougan said Wednesday. Hougan argued that crypto outside of Bitcoin is shifting into a revenue-driven market in which network activity feeds native-token value, and that investors have not yet priced in that transition, leaving certain assets undervalued.

He cited Hyperliquid, Uniswap, Aave, Pump.fun and Lighter as protocols converting fees into token demand or supply reductions. Hougan said he expects decentralized finance (DeFi) applications and layer-1 networks to adopt comparable revenue-capture mechanisms over the next 12 to 24 months, and that stronger links between protocol revenue and token value could eventually give investors conventional valuation metrics. He also noted that token holders lack the legal claims on cash flow that shareholders hold and that community-set tokenomics can change.

Hyperliquid, the decentralized exchange that generated more than $800 million in revenue last year, uses roughly 99% of that to buy and burn HYPE. On Aug. 6, Hyperliquid reported $169 million in second-quarter revenue and directed $141 million toward HYPE buybacks. Uniswap linked revenue to its token after its "UNIfication" overhaul, approved Dec. 22, 2025, activated protocol fees to fund UNI burns, allowing collected fees to be claimed by burning UNI and tying protocol activity to supply reductions. Aave DAO's buyback program has purchased more than 205,000 AAVE over its first 10 months, and on June 25 Aave founder Stani Kulechov said the team was designing an automated, non-discretionary buyback mechanism. "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 broader shift to a more permissive U.S. regulatory environment following years in which projects avoided revenue-sharing features over securities-law concerns. On Aug. 5 he said regulatory guidance could allow crypto to keep expanding even without the CLARITY Act, framing clearer rules as a tailwind for token-linked revenue mechanisms across DeFi and layer-1 networks.