During Bitcoin's consolidation, which DeFi tokens broke out with independent rallies?
- Core Viewpoint: During Bitcoin's consolidation, leading DeFi tokens with real holder dividends generally outperformed the broader market, with a median gain of 12.9%—more than double that of Bitcoin. However, dividend growth is only one pricing factor; valuation alone cannot predict price movements, and token unlocks and FDV must be taken into account.
- Key Elements:
- A statistical review of 19 dividend-paying DeFi tokens from August 22 to October 20 found that 14 outperformed Bitcoin, with Raydium leading at a 178% gain and the sample median gain at 12.9%.
- The dividend-growth group posted a median gain of 18.3%, far above the 6.9% of the no-dividend-growth group, indicating that actual returns distributed to holders are positively correlated with token prices.
- Raydium's buyback scale grew from $360,000 to $3.94 million (11x) driven by LaunchLab integration; nearly half of Uniswap's revenue came from Robinhood Chain; Aerodrome's September dividend revenue reached $14.9 million after the merger.
- Low valuation does not equal opportunity: AERO traded at just 8.7x valuation multiples yet surged 77%, while edgeX at 15x—the second-lowest in the sample—fell 22%.
- Hyperliquid's dividend yield rose 79% but its token price gained only 6%, with FDV at 85x; roughly $800 million in monthly HYPE unlocks far exceeded $75 million in buybacks, and selling pressure capped gains.
- The sample covers only 19 tokens over a 59-day period, so the conclusions are not absolutely conclusive; calculating valuation based on circulating market cap would underestimate the actual dilution pressure from locked tokens.
Original author: The DeFi Edge
Original translation: Luffy, Foresight News
Bitcoin has been trading sideways for two months, but many DeFi tokens have completely refused to lie flat with the broader market.
After Bitcoin surged 21% in August, it entered a range-bound phase. Starting August 22, Bitcoin's daily closing price has consistently fluctuated between $75,600 and $86,600. During this period, Bitcoin gained 5.6% overall, while Ethereum actually fell 2.7%.
Among the 19 leading DeFi tokens we tracked that distribute revenue to token holders, 14 outperformed Bitcoin. Raydium, for instance, rose 178%. The median gain across this group of tokens reached 12.9%, more than double Bitcoin's increase.
Why Focus on "Actual Revenue Distributed to Holders"?
Looking only at total protocol revenue can be misleading. Some protocols earn a lot of money but distribute none of it to token holders—the revenue may end up in the team's pockets.
So this article tracks "actual revenue distributed to holders": including token buyback and burn, fee burning, and revenue paid directly to token holders. This methodology comes from DeFiLlama.
To qualify, tokens must meet the following criteria:
- Only core DeFi projects are included: DEXs, perpetual contracts, lending, collateralized debt positions, liquid staking, yield tools, and yield aggregators. Public chains, oracles, and launchpads are excluded (including Pons, etc.).
- Market cap exceeded $100 million as of August 22.
- The project has a record of distributing revenue to holders over the past year.
All tokens meeting the screening criteria are included. Whether it's Raydium using profits from its Launchpad business to buy back tokens, or Hyperliquid directly burning fees, both count as actual revenue distributed to holders.
The statistical period is August 22 to October 20, compared with the previous 59 days of data. Price data comes from CoinGecko, and 19 tokens were ultimately selected.
"Market Cap / Holder Annualized Revenue" in the table refers to total market cap divided by the total revenue distributed to holders over a year, based on current revenue levels. The lower the figure, the less investors are paying for each dollar of dividends.
Which Tokens Performed Best?
Dividing the tokens into two groups for comparison: the group with dividend growth saw a median price gain of 18.3%, while the other group gained only 6.9%.
The top three tokens all have clear revenue growth logic:
- Raydium: On September 5, tokenized stock issuance platform StonkFun integrated with Raydium's LaunchLab. RAY token buybacks surged from $360,000 in July to $3.94 million in September—an 11x increase.
- Uniswap: The fee distribution mechanism has long been active, and combined with massive trading volume from Robinhood Chain, nearly half of Uniswap's protocol revenue in September came from this public chain.
- Aerodrome (AERO): After the merger of Aerodrome and Velodrome, token holders receive trading fees plus payments from projects buying liquidity. This revenue reached $14.9 million in September, already exceeding the $10.5 million paid to liquidity providers.
The reverse also holds true: edgeX's actual revenue distributed to holders fell 15%, and its token price dropped 22%, making it the worst performer in the sample.
Does low valuation equal a good opportunity? This data gives a different answer—and the results are quite surprising. AERO had the lowest valuation multiple at just 8.7x, and its token price surged 77%; edgeX had a 15x valuation, the second lowest in the sample, yet its performance was dead last. Looking only at valuation levels simply cannot predict subsequent token price movements.
There are also some tokens that don't fit the above pattern.
- Hyperliquid (HYPE): Revenue distributed to holders surged 79%, but the token price rose only 6%. Based on fully diluted valuation (FDV), the valuation is as high as 85x; approximately $800 million worth of HYPE unlocks and flows out each month, but monthly buybacks amount to only $75 million—the market needs to absorb enormous selling pressure.
- Sky (SKY): A governance vote on August 13 approved using 55% of each period's revenue for token buybacks and 45% for distribution to staking users. Holder revenue nearly quadrupled, but the token price rose only 11%.
- Aave (AAVE): After the rsETH security incident, Aave suspended token buybacks and distributed no dividends to users during the statistical period, yet the token price still rose 24%.
In my view, market pricing considers both current dividend levels and future revenue expectations. Dividend expectations are not the only factor affecting token prices.
If Bitcoin Enters Another Sideways Phase, How Should You Choose DeFi Tokens?
When researching projects, you need to look at all three of these factors—none can be omitted:
- The actual revenue the project distributes to holders is already trending upward.
- There must be real catalysts: such as launching new businesses, enabling fee distribution that brings more trading volume, or protocol mergers.
- You must check token unlocks and FDV (fully diluted valuation). Hyperliquid is a cautionary tale—once a large number of tokens unlock and flood the market, it will suppress price gains.
Some Additional Notes
- This is only a sample of 19 tokens over a 59-day statistical period, so the conclusions are not absolutely conclusive. With one more month of data, the rankings of mid-tier tokens could very well be completely rewritten.
- Token prices and dividend revenue are measured over the same two-month period. This methodology is merely an observational indicator—it does not mean that on August 22 you could have precisely selected winning tokens using these rules.
- Valuation multiples in this article are calculated using circulating market cap. Many projects have large amounts of locked tokens, which can make valuations appear cheaper than they actually are. Hyperliquid's valuation based on circulating market cap is 19.6x (circulating market cap of $18.1 billion), but based on FDV it's as high as 85x (FDV of $77.8 billion).
- Holder revenue data comes from DeFiLlama. The data cannot be 100% accurate, but it is already the industry's best-quality data source.
- Some projects distribute dividends in batches. For example, Lido's buybacks are executed uniformly after DAO voting—a low-revenue month does not mean the project has stopped distributing dividends.
- Meteora was not included in the two-group price comparison because its dividend feature was just launched and there is no historical data for comparison.
- THORChain's holder revenue comes from fee-based burning of RUNE tokens. On September 12, the burn ratio was lowered from 5% to 1%, so its price movements are unrelated to dividend growth logic.
- Supplementary data on outlier samples: Hyperliquid distributed a total of $146.9 million in revenue to holders over these 59 days, accounting for 59% of the total revenue across all samples; the team unlocks approximately 9.9 million HYPE per month. Sky's valuation multiple dropped from 98x to 28.5x.
