Token buybacks keep growing, but the price floor keeps failing
In an August 12 memo, Matt Hougan, chief investment officer at asset manager Bitwise, said most crypto tokens other than Bitcoin are undervalued.
Investors are not aware of how much revenue protocols now pay back to holders. The clearest example is Hyperliquid retiring $1.3 billion of its HYPE token, he said. If the trend continues, the market “could see valuations double or more,” Hougan added.
Hougan says tokens now trade on revenue
For years, the main criticism of crypto was that networks could scale significantly, yet tokens captured little value.
Hougan said, “That era is over,” in the memo titled “Crypto’s Revenue Revolution.” He believes tokens are beginning to trade on the same yardstick as equities and bonds, which is revenue.
Hougan explicitly tied his valuation claim to his belief that the link between protocol revenue and token price is strengthening. Bitwise said the memo represents a snapshot assessment and is not investment advice.
Hyperliquid generated over $800 million in revenue in the last year. The DEX sends about 99% of its fees to buy HYPE on the open market and burn it, according to the Bitwise memo.
Since the token went live in November 2024, those purchases take $1.3 billion of HYPE out of supply permanently.
Hougan said HYPE is up about 800% since launch, at a time when Bitcoin has lost about a third of its value. He credits part of the HYPE’s run to buyers predicting that rising volume would feed straight into the burn.
HYPE changed hands at $57.77, up 2.8% over seven days and 11.1% over the past 30 days, according to CoinGecko data.
Uniswap and Aave copy Hyperliquid’s model
Uniswap’s December 2025 vote on “UNIfication” switched on protocol fees for the first time, instantly burning 100 million UNI, or about $590 million. It now generates about $100 million a year, and it spends all of that on buybacks.
Aave plans to burn about $30 million of AAVE per year, close to a fifth of its revenue. It has implemented an automated program called Aavenomics 3.0.
Pump.fun, doing $328 million in annual revenue, had burned $370 million of PUMP by April 2026. Lighter, a newer perpetuals venue, bought back about 6% of its LIT supply on $67 million of revenue.
“Revenue fever” has reached base-layer chains, Hougan said. Solana’s community has proposed SGP-0003 to increase its fee burn up to 14 times.
Aptos hiked gas fees tenfold this year. Activity on Aptos almost tripled, and annual token burns soared from ~90,000 to about 1.9 million.
A January Cryptopolitan report found that shrinking supply has not reliably lifted prices and that many tokens with regular buybacks still underperformed the market and failed to hold a floor.
Even Hyperliquid broke its initial “up only” pattern. Pump.fun, at one point, had repurchased more than 18% of its supply while the token sat near its lows.
Hougan stated that a token buyback is not like a stock buyback since there’s no contractual right to profits or assets. Governance can always rewrite or change the economics.
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