The 10 highest-grossing crypto protocols generated $1.2 billion in revenue during the 30 days ending Aug. 28, representing a 9.3% increase from the previous month’s total of $1.1 billion per DefiLlama data.

Ethena led the percentage gains with a 243% revenue surge, jumping from $9.46 million to $32.48 million, as its synthetic dollar USDe captured market share from traditional stablecoins.

The protocol’s revenue expansion of $23 million represented the second-largest absolute increase among tracked applications.

Pump.fun posted the second-highest percentage growth at 79%, with revenue climbing from $22.55 million to $40.39 million.

The Solana-based memecoin launchpad benefited from continued speculation in newly created tokens, generating an additional $17.84 million in monthly fees.

Stablecoin dominance continues

Tether maintained market leadership despite modest 2.9% growth, with revenue rising from $614.79 million to $632.91 million.

The stablecoin issuer’s $18.12 million increase represented the largest absolute gain among protocols, reinforcing its position as the sector’s primary revenue generator.

Circle ranked second with revenue growing 4.5% from $197.59 million to $206.4 million, adding $8.81 million in monthly fees. Combined, the two stablecoin issuers accounted for 70% of total crypto protocol revenue during the tracking period.

Hyperliquid recorded substantial growth with revenue expanding 25.9% from $82.86 million to $104.3 million. The decentralized perpetual exchange captured an additional $21.43 million as trading volumes increased across its platform.

Mixed performance across sectors

Sky Protocol achieved 77.5% revenue growth, rising from $10.1 million to $17.93 million. Jupiter reported 23.5% growth, with revenue increasing from $21.95 million to $27.1 million, driven by activity in the Solana ecosystem.

Tron recorded moderate gains of 11.6%, with revenue climbing from $56.21 million to $62.73 million. Phantom wallet generated $22.82 million, up 9.5% from $20.84 million in the previous period.

Axiom provided the sole negative performance among top protocols, with revenue declining 13.9% from $62.11 million to $53.46 million. The cross-chain infrastructure provider lost $8.65 million in monthly fees, the only one in the group with a negative result.

Revenue growth occurs alongside the broader crypto market recovery, with protocols benefiting from increased user activity and higher fee generation across decentralized finance applications and trading platforms.

Mentioned in this article

NFTs (non-fungible tokens) have moved from niche experiments to a global phenomenon in just a few years. They enable artists, brands, and collectors to prove ownership of digital items, creating new forms of economic and creative exchange. From art and music to virtual real estate, collectibles, and even integration with online sectors like casino sites non GamStop, NFTs have become a key part of the digital economy.

However, this rapid adoption has sparked a serious debate about the technology’s environmental impact. The blockchain networks powering NFTs consume energy every time a transaction is processed. 

Why Blockchain Energy Use Matters for NFTs

The energy intensity of NFTs is tied directly to the blockchain infrastructure they rely on. Minting, buying, and transferring NFTs all require computational validation by network participants. PoW blockchains, such as Bitcoin and Ethereum before its proof-of-stake transition, require miners to solve complex mathematical problems using powerful hardware. These mining farms often run 24/7, consuming electricity at a scale that rivals small countries.

For NFTs, this means that every digital artwork or collectible minted on an energy-hungry network carries a measurable carbon footprint. This is true for everyday transactions as well as record-breaking deals, such as some of the most expensive signings in the NFT space, which often involve large-scale minting and transfer activity. Public awareness of this environmental cost has grown, with critics questioning the long-term sustainability of NFTs in their current form. This has led to an industry-wide push for solutions that preserve the benefits of NFTs while drastically lowering their environmental impact.

Why NFTs Have a High Environmental Cost

To understand the environmental challenge, we need to look at how NFTs are created and maintained. NFTs exist on blockchains, and every transaction—whether minting, buying, or transferring — must be validated by the network.

On PoW-based blockchains like Ethereum (before its transition to proof-of-stake), this validation process involves miners solving complex mathematical problems. This requires powerful computers running continuously, often powered by fossil fuels. The energy demand of large-scale PoW mining operations can rival that of small countries. Aside from these environmental concerns, there is also the reality of NFTs losing value over time, with many once high-priced assets now trading for a fraction of their original cost.

Key environmental concerns include:

• Energy Consumption – PoW mining demands high electricity usage, leading to greenhouse gas emissions if powered by non-renewable sources.

• Hardware Waste – Mining requires specialised hardware with limited lifespans, creating e-waste.

• Carbon Emissions – The higher the network activity, the greater the emissions from non-renewable power plants.

The criticism aimed at NFTs often stems from this link between blockchain transactions and carbon-heavy energy production.

The Shift Towards Sustainable Blockchain Solutions

The NFT industry has started addressing these concerns, particularly the issue of NFTs energy use, through two main approaches:

1. Consensus Mechanism Changes – Moving from PoW to proof-of-stake (PoS) or other low-energy consensus methods drastically cuts energy usage.

2. Integration of Renewable Energy – Running blockchain nodes and mining operations on renewable energy sources such as wind, solar, hydro, and geothermal.

These changes are not simply cosmetic. They represent a fundamental shift in how NFTs can exist without leaving a disproportionately large environmental footprint.

Proof-of-Stake as a Game-Changer

Proof-of-stake works differently from PoW. Instead of requiring miners to solve energy-intensive puzzles, PoS selects validators based on the amount of cryptocurrency they “stake” as collateral. This reduces energy consumption by up to 99% compared to PoW.

Ethereum’s shift to PoS in 2022 is a prime example. This single change reportedly reduced its network energy consumption from approximately 112 TWh per year to just 0.01 TWh per year. For NFTs minted on Ethereum, this has dramatically lowered their associated carbon emissions.

Other PoS-based blockchains such as Solana, Tezos, and Cardano have positioned themselves as environmentally conscious alternatives from the start. Many NFT projects are now choosing these networks to align with sustainability goals.

Renewable Blockchain Protocols – How They Work

Before diving into how renewable blockchain protocols operate, it’s worth recalling what are NFTs in their simplest form: unique digital assets stored on blockchains. These protocols go beyond just using PoS. They incorporate renewable energy sources directly into the blockchain’s operational infrastructure.

This can involve:

• Node Hosting on Renewable Energy – Validators or miners operate in regions with abundant clean energy and connect to grids powered primarily by wind, solar, or hydroelectricity.

• On-Site Renewable Power Generation – Operators install their own renewable power systems, such as solar farms or wind turbines, to run blockchain infrastructure.

• Carbon Offsetting Through Renewable Investments – Part of the transaction fees or block rewards are allocated to fund renewable energy projects or purchase renewable energy certificates.

By integrating renewable energy into the blockchain’s DNA, these protocols reduce dependence on fossil fuels while maintaining network security and reliability.

Examples of Renewable-Focused NFT Blockchains

A number of blockchain projects have emerged with a strong emphasis on energy efficiency and renewable energy integration. These networks are positioning themselves as sustainable choices for NFT creators, collectors, and marketplaces that want to reduce their environmental impact without compromising performance.

• Tezos – Built on a proof-of-stake consensus model, Tezos consumes dramatically less energy than traditional PoW networks. A transaction on Tezos requires about the same energy as sending an email, making it one of the most eco-friendly blockchains currently in use.

• Algorand – Algorand operates as a carbon-negative blockchain. In addition to its proof-of-stake design, the network partners with organisations to offset more carbon than it emits.

• Chia – Chia uses a proof-of-space-and-time consensus mechanism, which relies on hard drive storage capacity instead of intensive computational work. While it shifts resource demand from electricity to storage, many Chia farmers run their operations on renewable power, making it a lower-impact option for certain NFT applications.

• Solana – Known for its high transaction throughput and low costs, Solana runs on a proof-of-stake system enhanced with proof-of-history for added efficiency. The network has worked with renewable energy initiatives to further reduce its carbon footprint and publishes regular sustainability reports.

• Cardano – Cardano’s Ouroboros proof-of-stake protocol is designed to operate with minimal energy requirements while maintaining strong security.

• Flow – Developed by Dapper Labs, Flow was built for scalability and efficiency from the start. It uses a multi-node architecture that reduces redundant computation, significantly lowering energy usage.

Benefits of Renewable Blockchain Protocols for the NFT Market

The adoption of renewable blockchain protocols offers several tangible advantages for the NFT sector:

1. Reduced Carbon Footprint – Lower emissions make NFTs more acceptable to environmentally conscious users, brands, and institutions that might otherwise avoid the space due to sustainability concerns. This opens the door to collaborations with organisations that have strict ESG (Environmental, Social, and Governance) targets.

2. Positive Public Perception – Creators and companies can publicly showcase their commitment to sustainability, which can become part of their brand identity. In a competitive NFT market, a strong environmental stance can be a selling point.

3. Long-Term Energy Stability – Renewable power sources are not tied to volatile fossil fuel markets, allowing more predictable operational costs for blockchain infrastructure and marketplaces.

4. Regulatory Alignment – Governments are increasingly introducing carbon-reduction regulations. Operating on renewable-powered or low-energy blockchains positions NFT projects to meet these standards without costly last-minute changes.

5. New Market Opportunities – Sustainability credentials can help NFT projects tap into eco-focused investor networks and grant programmes that would not fund high-emission operations.

Overcoming the Challenges of Renewable Blockchain Adoption

While the shift to renewable blockchain protocols is promising, several challenges remain:

• Geographical Limitations – Not all regions have reliable renewable infrastructure.

• Upfront Costs – Renewable power systems and sustainable data centres require initial capital investment.

• Scalability Concerns – Some renewable-powered blockchains are still developing capacity to handle very high transaction volumes.

These issues can be addressed through strategic partnerships, decentralised hosting models, and technological innovation.

NFT Creators and Marketplaces Leading the Way

Many NFT creators and marketplaces have already embraced greener blockchain options:

• Digital artists are selecting blockchains like Tezos or Algorand to reduce environmental criticism.

• Marketplaces such as Objkt and Hic et Nunc are exclusively built on low-energy blockchains.

• Collaborations between renewable energy providers and NFT platforms are funding new clean energy projects.

This trend shows that the market is not only aware of the environmental issue but is actively working to solve it.

How Renewable Protocols Affect NFT Economics

Switching to renewable-powered or low-energy blockchains can also influence the economics of NFTs:

• Lower Transaction Fees – PoS and other efficient consensus mechanisms often result in cheaper fees, making NFT minting more accessible.

• More Stable Network Costs – Renewable energy can shield blockchain operations from fossil fuel price spikes.

• Market Expansion – Sustainability can attract new participants who previously avoided NFTs due to environmental concerns.

Over time, this could shift demand away from older, energy-intensive networks toward greener alternatives.

Future Outlook – NFTs in a Carbon-Conscious World

The NFT industry is still in its early stages, but sustainability is becoming an unavoidable priority. As public concern over climate change grows, the demand for environmentally responsible technologies will intensify. Renewable blockchain protocols are set to play a central role in shaping how NFTs evolve over the next decade.

In the coming years, we can expect to see:

• Mandatory Carbon Tracking – NFT marketplaces and blockchain networks may be required to publish detailed carbon accounting reports, showing the exact emissions per transaction. This level of transparency will help users make informed decisions about where to mint, buy, or sell NFTs.

• Full Renewable Integration – More blockchain networks could transition to operating entirely on renewable energy, either through decentralised renewable-powered nodes or through partnerships with green energy providers. In time, fully carbon-neutral NFT ecosystems could become the industry standard rather than the exception.

• Dynamic Carbon Offsetting – Advanced protocols might introduce systems that calculate the carbon footprint of each NFT transaction in real time and automatically purchase offsets or fund renewable projects instantly.

• Consumer-Led Demand Shifts – Buyers are becoming more selective, favouring NFTs with a verifiably low-carbon impact. Creators who adapt early to renewable-powered networks will have an advantage as this preference becomes mainstream.

• Regulatory Pressure and Incentives – Some regions may offer tax breaks, subsidies, or priority licensing to blockchain projects that demonstrate renewable energy usage, while imposing penalties on those with high emissions.

These developments would make NFTs not only innovative in the digital economy but also aligned with global sustainability goals.

Two decentralized science altcoins are wavering after gaining support from Coinbase, the top US-based crypto exchange platform by volume.

In a new thread on the social media platform X, Coinbase announced the addition of two decentralized science (DeSci) protocols – Bio Protocol (BIO) and ResearchCoin (RSC) – to its suite of crypto products.

Following the announcements, the tokens both fell in price.

“ResearchCoin [and] Bio Protocol [are] now live on http://coinbase.com and in the Coinbase iOS and Android apps. Coinbase customers can log in to buy, sell, convert, send, receive or store these assets.”

BIO is trading for $0.0612 at time of writing, a 7.3% decrease on the day while RSC is valued at $0.493, a 34% dip in price during the last 24 hours.

Earlier this week, Coinbase also added support for RSC – a project backed by Coinbase CEO Brian Armstrong that aims to improve science communication and research – on Base, its proprietary blockchain, causing the asset to spike in price at the time.

According to its official website, Bio Protocol is a blockchain that allows users to help fund early-stage biotech, making developments faster and more accessible.

“Our mission is to reshape how biotech breakthroughs are born by enabling global communities of patients, researchers and crypto users to create user-owned research networks that fund and develop new and emerging biotechnologies from day one?.

At its core, Bio is designed to help scientists raise funds for their research, create value from that research, and capture and distribute that value via commercial successes. By breaking down traditional biotech barriers and introducing a permissionless framework, Bio can accelerate life-saving discoveries while making them more accessible to all.”

Follow us on X, Facebook and Telegram

Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox

Check Price Action

Surf The Daily Hodl Mix

&nbsp

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/Salamahin/HUT Design

HodlX Guest Post  Submit Your Post

DeFi (decentralized finance) offers an innovative alternative to the traditional mortgage system, challenging long-standing yet largely inefficient lending processes in developing countries.

It could be revolutionary in emerging economies with limited access to stable long-term financing. Could fixed-rate lending protocols empower people to take control of their finances?

The lending dilemma in developing countries

Worldwide, major markets move in sync. When interest rates spike in one market, the whole world feels the ripple effect, even among markets of dramatically different sizes.

Every move the United States makes compounds the issue due to the dominance of the US Dollar and the influence of the US Treasury Market, which is the benchmark for global interest rates.

The effect goes both ways. Low and lower-middle-income countries are home to approximately four billion people, so their economic malaise – a state of economic stagnation or downturn characterized by persistent inflation or lackluster growth – will inevitably spill over.

Their economic development is already below average relative to other nations, heightening tensions.

Major lenders are often reluctant to service people living in developing countries because of high perceived risk.

These locations are susceptible to economic instability, which impacts long-term mortgage financing and increases loan defaults.

The lack of a stable local currency, standardized underwriting practice or credit bureaus complicates the conventional approach.

Emerging economies are in a transitional phase of economic development. Relatively high economic growth leads them toward becoming developed nations.

Even under these circumstances, mortgage lending remains poorly understood and inaccessible. DeFi poses a solution – fixed-rate lending protocols.

How DeFi fixes fixed-rate mortgages

Risk-averse centralized institutions with rigid standards dominate traditional lending systems, leaving people in developing countries without access to the funds to purchase a home.

Historically, they have been the only option, even though their processes tend to be outdated, inefficient and exclusionary.

DeFi can potentially democratize homeownership and stimulate the economy by providing an alternative financing solution less susceptible to local market volatility, supporting developing nations and their inhabitants.

Blockchain technology simplifies, secures and streamlines financial transactions, benefiting underbanked and unbanked individuals.

Research shows it directly correlates to improved economic empowerment, financial inclusion, user satisfaction and trust in financial institutions because it enables better access to financial services.

DeFi protocols leverage blockchain technology

Conventional mortgage document verification requires time-consuming cross-validation. The title management process is similarly inefficient and prone to human error and fraud.

Since property transactions and loan servicing involve multiple parties and extensive paperwork, borrowers are often confused about their loan term, interest rate or outstanding balance.

If the lender’s practice is not streamlined, going through conventional channels can take days or weeks.

The time-consuming mortgage underwriting process can take weeks, depending on how busy the lender is and whether the underwriter needs more information.

In comparison, it takes mere minutes to secure a DeFi loan.

DeFi protocols leverage blockchain technology for transparent, accessible and affordable fixed-rate loans, bypassing the inefficiencies and high costs associated with conventional banking.

They store all relevant property, payment and personal details in a tamper-resistant ledger to ensure accuracy and fairness.

Smart contracts facilitate and automate mortgage contracts.

This technology improves verification speed, reduces disputes and eliminates redundancies, enabling institutions to quickly verify documents and offer mortgages.

The process is more transparent, enhancing trust among those in developing nations.

The benefits of DeFi fixed-rate lending protocols

DeFi enables new forms of home ownership and property investment, which are ideal for those in emerging economies.

In peer-to-peer lending, for instance, they could earn a 15% annual percentage yield by lending stablecoins through crypto savings accounts or liquidity pools.

They could use smart contracts to enforce the payback period, reducing counterparty risk.

Asset tokenization enables fractional ownership of loan portfolios, allowing investors to own portions of real estate instead of purchasing it in full.

Communities can collect their funds in liquidity pools to help individuals take out mortgages they wouldn’t have been able to get alone.

Blockchain technology streamlines and lowers the cost of the mortgage process by making most intermediaries redundant.

Traditionally, lenders charge for originating the loan and may also require recipients to pay third-party closing costs for services like appraisals and title insurance.

DeFi has low overhead expenses, making the process more cost-effective.

The future of fixed-rate DeFi lending

Since the blockchain provides an immutable digital ledger, it provides a secure, transparent platform for lenders, borrowers and intermediaries.

Leveraging this technology for fixed-rate lending protocols helps reduce confusion and improve reliability, even in uncertain market conditions.

It could challenge the traditional mortgage process, reshaping the financial future.

Devin Partida is the editor-in-chief of ReHack and is especially interested in writing about fintech. Devin’s work has been featured on Entrepreneur, Forbes and Nasdaq.

Check Latest Headlines on HodlX

Follow Us on Twitter Facebook Telegram

Check out the Latest Industry Announcements  

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any loses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Featured Image: Shutterstock/Pretty Vectors

Between July 21 and 25, the total stablecoin market cap increased by $4.505 billion to reach $265.22 billion, a 1.73% expansion. Over the same timeframe, total value locked (TVL) in DeFi dropped from $140.804 billion to $135.934 billion, a 3.46% drawdown.

While the rise in stablecoin supply could be interpreted as a sign of incoming capital, the simultaneous drop in DeFi TVL tells us that the new liquidity isn’t being deployed; it’s waiting.

Ethereum saw its TVL fall 2.53% in the past 24 hours despite leading a 7-day climb of over 7.5%. Its price remained relatively stable over the three days, jumping to $3,707 on July 24 and returning to $3,565 on July 25, posting a net gain of just 0.78%.

Price stability paired with a declining TVL and expanding stablecoin base indicates a shift in the market. Capital seems to be rotating out of yield-bearing DeFi positions into liquid, passive stablecoins.

The TVL to stablecoin supply ratio, an effective proxy for on-chain capital efficiency, fell from 0.535 to 0.513 over the past three days. The drop suggests that on-chain capital is growing more risk-averse. With fewer stablecoins being deployed in DeFi protocols and more sitting idle in wallets, bridges, and exchange balances, traders seem to be preparing for another bout of volatility.

This caution is clearly seen in data from DeFi Llama. Ethereum accounts for $81.094 billion of total DeFi TVL and $133.008 billion in stablecoins, yielding a TVL/stablecoin ratio of 0.61, close to the market average. However, a deeper look across other chains shows a fragmented landscape with sharp differences in capital utilization.

Ethereum anchors, Tron hoards

Tron carries $81.989 billion in stablecoins (nearly a third of the entire market), but only $5.766 billion in TVL. That ratio of 0.07, the lowest among top chains, confirms Tron’s role as a stablecoin bridge and settlement layer rather than a yield-driven ecosystem. The new $4.5 billion in stablecoins that entered circulation this week appears to have landed primarily on Tron, Ethereum, and a few L2s like Base and Arbitrum.

Arbitrum and Base showed more balanced deployments. Base holds $4.171 billion in stablecoins and $4.164 billion in DeFi TVL, nearly a 1:1 ratio. Arbitrum follows closely with $3.492 billion in stables and $2.889 billion in TVL, implying capital is actively deployed. In contrast, Solana and BSC maintain moderate deployment ratios of 0.84 and 0.61, respectively. However, both saw sharp one-day drawdowns in TVL, with Solana losing as much as 10%.

Sui and Avalanche show the inverse pattern, with more TVL than stablecoins. Sui has a 2.11 TVL/stables ratio, suggesting capital on the chain is being held in volatile or native assets like LSTs, bridged tokens, or RWAs rather than in stablecoins. Avalanche, too, shows a slight over-indexing in TVL versus stable liquidity.

The combination of growing stablecoin supply and falling TVL is counterintuitive in a healthy, bullish market, where stablecoin mints are often a precursor to yield deployment and leverage. The change we’ve seen in the past three days implies that traders have become slightly more risk-averse.

This may be due to several different factors. DeFi lending rates across protocols remain low, reducing the appeal of stablecoin carry trades. Leverage unwind on perps and restaking positions may be spilling into DeFi TVL. Larger capital pools could also be waiting for new opportunities to deploy.

Stablecoin dominance data supports this interpretation. With USDT holding 61.80% of the total stablecoin market, capital is consolidating in the most liquid, CEX-friendly unit. This choice reinforces the view that large holders are keeping their options open. They want to be able to exit quickly or rotate into other assets like BTC/ETH/perps without slippage.

While DeFi TVL fell nearly $5 billion over three days, ETH managed to stay afloat, even posting a modest gain. This decoupling implies that ETH price action is driven more by structural factors than organic DeFi growth.

That said, if idle stablecoins on Ethereum and L2s eventually rotate back into DeFi through restaking, LSTs, or new incentive programs, ETH could benefit as demand for blockspace rises and staking-derived fees increase. Conversely, if stablecoin capital remains undeployed and ETH fails to hold its current range, the lack of DeFi bid support could become a tailwind for ETH/BTC rotation.

The post Capital shifts to stablecoins as DeFi protocols bleed TVL appeared first on CryptoSlate.

We are excited to announce plans to introduce $INK tokens and Inklayer 2 into our existing suite of products and unlock the wave of new use cases with on-chain protocols and infrastructure. We aim to provide a seamless on-chain experience and new opportunities for our global client base.

$Ink is issued by a subsidiary of Ink Foundation, an independent entity that manages Ink Layer 2 and its ecosystem.

Tokens are designed to unify users, protocols and builders across the ink layer 2 ecosystem. $Ink Tokens will become part of the Kraken Drops program and will be broadcast to qualified, active Kraken clients and ecosystem participants.

“Our aim is to see a production-grade on-chain system that is deeply integrated into everything we offer,” said Arjun Sethi, Kraken Co-CEO.

“Including Layer-2 provides the world with a throughput, low endurance and EVM compatible environment that can be extended across the trading and payment infrastructure. The Ink Foundation standardizes the value movement not only for defi users, but for those operating in institutions, market makers and digital asset spaces.”

“Kraken supports the Ink Foundation’s efforts to coordinate the infrastructure for both Onchain and Offchain users with the same performance, security and global accessibility.”

The Ink Foundation board stated, “This is a crucial moment for the ink community and for everyone who works to embed open and authorized funds in their daily lives for the public.”

“By introducing $Ink and InkNative protocols into products that millions of users already trust, Kraken is leaping into a world where CEFI and Defi are not split. This is just the beginning of a United capital market that anyone can use. The actual work begins here and the future is ours.”

Details of these plans and $Ink Airdrop will be shared in the future as we reach the milestone.

Crypto veteran Arthur Hayes says he looks for two main features when considering what digital asset protocols to invest in.

The BitMEX founder notes in a new interview with The Rollup that he specifically looks for protocols that have a track record of users spending their own money for the project’s services.

“They’re not spending token emissions, they’re spending their own stables or other crypto to use as a product or service.” 

In terms of a good example of that, Hayes cites Hyperliquid (HYPE), a layer-1 protocol with a decentralized exchange (DEX) that has witnessed significant user and volume growth in its less than two years of existence.

The crypto veteran also says he looks for protocols that provide ways to enrich their token holders.

“I want to see how I’m getting paid. Is it a token buyback, is it an emission, what’s the scheme? There are all different flavors depending on how you want to incentivize behavior, but at the end of the day, I buy a token, I want some sort of APY, and then I can take that APY and run some sort of financial analysis.” 

He criticizes the decentralized exchange (DEX) Uniswap (UNI), which he says is an expertly created protocol that doesn’t do anything to reward its users.

?

Follow us on X, Facebook and Telegram

Don’t Miss a Beat – Subscribe to get email alerts delivered directly to your inbox

Check Price Action

Surf The Daily Hodl Mix

&nbsp

Disclaimer: Opinions expressed at The Daily Hodl are not investment advice. Investors should do their due diligence before making any high-risk investments in Bitcoin, cryptocurrency or digital assets. Please be advised that your transfers and trades are at your own risk, and any losses you may incur are your responsibility. The Daily Hodl does not recommend the buying or selling of any cryptocurrencies or digital assets, nor is The Daily Hodl an investment advisor. Please note that The Daily Hodl participates in affiliate marketing.

Generated Image: Midjourney

The average stablecoin liquidity per token declined from $1.8 million in 2021 to just $5,500 in March 2025, a 99.7% drop, forcing protocols to demonstrate sound reasons for investors to hold.

According to a recent report by research firm Decentralised, the drop illustrates how rising token issuance, now surpassing 40 million assets, has diluted available capital without a corresponding increase in demand or user retention.

The report frames this trend as evidence of a zero-sum dynamic in crypto capital allocation, where the influx of new tokens outpaces the expansion of capital pools, resulting in lower liquidity, weaker communities, and diminished engagement. 

Without durable revenue sources, user interest frequently dissipates following short-term incentives such as airdrops. Without sustainable economic structures, attention has become a liability rather than an asset.

Liquidity compression

The report used stablecoin liquidity as a proxy for capital availability. It highlighted that the stagnation of new capital inflows amid surging token counts has left many crypto projects undercapitalized. 

With fewer resources per token, the traditional 2021-era playbook — launching a community through Discord servers and airdrop campaigns — no longer produces lasting engagement. 

Instead, the report argues, projects must now demonstrate product-market fit and sustained demand through revenue generation.

Revenue functions as a financial metric and as a mechanism for signaling relevance and economic utility. Protocols that generate and retain cash flows are better positioned to justify token valuations, establish governance legitimacy, and maintain user participation. 

The report distinguished between mature platforms like Ethereum (ETH), which rely on ecosystem depth and native incentives, and newer protocols that must earn their place through consistent performance and transparent operations.

Varying capital needs and strategies

The report outlined four maturity stages for crypto projects: Explorers, Climbers, Titans, and Seasonals. Each category represents a different relationship to capital formation, risk tolerance, and value distribution.

Explorers are early-stage protocols operating with centralized governance and volatile, incentive-driven revenue. While some, such as Synthetix and Balancer, show short-term spikes in usage, their primary goal remains survival rather than profitability. 

Climbers, with annual revenue between $10 million and $50 million, begin transitioning from emissions-based growth to user retention and ecosystem governance. These projects must navigate strategic decisions around growth versus distribution while preserving momentum.

Titans — such as Aave, Uniswap, and Hyperliquid — generate consistent revenue, have decentralized governance structures, and operate with strong network effects. Their focus is category dominance, not diversification. Due to the Titans’ established treasuries and operational discipline, they can afford to conduct token buybacks or other value-return programs.

Seasonals, by contrast, are short-lived phenomena driven by hype cycles and social momentum. Projects like FriendTech and PumpFun experience brief periods of high activity but struggle to maintain user interest or revenue consistency over the long-term.

While some may evolve, most remain speculative plays without enduring infrastructure relevance.

Revenue distribution models

Drawing parallels with public equity markets, the report noted that younger firms typically reinvest earnings while mature firms return capital via dividends or buybacks. 

In crypto, this distinction is similarly tied to protocol maturity. Titans are well-positioned to implement buybacks or structured distributions, while Explorers and Climbers are advised to focus on reinvestment until operational fundamentals are secured.

According to the report, buybacks are a flexible distribution tool that is particularly suited for projects with volatile revenue or seasonal demand patterns. 

However, the report cautioned that poorly executed buybacks can benefit short-term traders over long-term holders. Effective buyback programs require strong treasury reserves, valuation discipline, and transparent execution. Without these, distribution can erode trust and misallocate capital.

The trend mirrors broader shifts in traditional markets. In 2024, buybacks accounted for roughly 60% of corporate profit distribution, outpacing dividends. 

This approach allows firms to modulate capital return according to market conditions, but governance risks remain if the incentives driving buyback decisions are misaligned.

Investor relations are key

The report identified investor relations (IR) as a critical but underdeveloped function across crypto projects. Despite public claims of transparency, most teams release financial data selectively. 

To build durable trust with token holders and institutional participants, a more institutional approach, including quarterly reporting, real-time dashboards, and clear token distribution disclosures, is needed.

Leading projects are beginning to implement these standards. Aave’s “Buy and Distribute” program, backed by a $95 million treasury, allocates $1 million weekly for structured buybacks. 

Hyperliquid dedicates 54% of revenue to buybacks and 46% to LP incentives, using revenue alone without external venture funding. Jupiter introduced the Litterbox Trust as a non-custodial mechanism to manage $9.7 million in JUP for future distributions only after reaching financial sustainability.

These examples show that responsible capital allocation depends on timing, governance, and communication, not just market conditions. As token liquidity per asset continues to decline, the pressure on projects to prove viability through cash flow and transparency will likely intensify.

Mentioned in this article