Tokenomics are evolving, asset quality is rising, DeFi is booming, and protocols are doing billions in volume & revenue
How do today's tokens stack up? Take a look
See below for descriptions & methodology
Methodology:
• Business = 40% fees + 60% revenue on a log scale ($1M=1, $1B=10, capped at 10)
• Accrual** (0-10) = % of fees going to buyback/burn/distribution at protocol's stated rate (3 pts) + directness (2) + automation (2) + net dilution (2) + usage-linked demand (1)
*Assumes full activation of every voted, committed or paused buyback program, running at its max approved rate
*rates are estimated for protocols using fixed dollar amounts
• Medians from the group: Business 6.3, Accrual 5.3
Protocol Descriptions:
HYPE: Business 9.8, $993M fees / $792M revenue; Accrual 8.7: 99% of trading fees to Assistance Fund, which auto-buys HYPE, effectively burned
AERO: Business 7.3, $146M fees / $111M revenue; Accrual 8.0: 100% of trading fees from gauge-staked pools go to veAERO (sAERO) voters
LIT: Business 6.3 (business median), $61M fees / $50M revenue; Accrual 7.6: 100% of Lighter trading fees buy back and burn LIT
SKY: Business 8.0, $336M fees / $164M revenue; Accrual 6.8: at reserve target, 100% of distributable surplus to SKY holders (45% buybacks, 45% USDS to stakers, 10% burned), about 1/3 of gross fees
UNI: Business 8.4, $1.59B fees / $128M revenue; Accrual 6.6: 1/6 of swap fees goes to the protocol, all of it burned as UNI
RUNE: Business 4.1, $23M fees / $6M revenue; Accrual 5.8: 1% of swap fees burned. Score comes from automation and low dilution
RAY: Business 6.9, $277M fees / $45M revenue; Accrual 5.6: 12% of every swap fee buys back RAY
JUP: Business 7.0, $204M fees / $65M revenue; Accrual 5.5: 25% of perps fees go to Jupiter, half of that buys JUP = 12.5% of perps fees
PYTH: Business 3.6, $8.8M fees / $5.3M revenue; Accrual 5.5: 60% of Pyth Pro revenue goes to DAO & all of it buys PYTH for the Reserve
AAVE: Business 7.4, $427M fees / $57M revenue; Accrual 5.3 (median): $50M/yr of AAVE buybacks, currently paused since rsETH hack
DRV: Business 3.3, $6.8M fees / $5.5M revenue; Accrual 5.1: 50% of protocol fees buy back DRV weekly
KNTQ: Business 3.8, $24M fees / $4M revenue; Accrual 4.9: Kinetiq takes 10% of kHYPE staking rewards, 70% of that buys & burns KNTQ (7% of rewards in total)
LINK: Business 8.0, $60M fees / $58M revenue (DefiLlama/onchain numbers); Accrual 4.8: ~$1.1M/week (~$57M/yr) of LINK bought by the Chainlink Reserve against an est. $137M-$190M total revenue annually (for Chainlink Labs as a whole). I set the Business score manually to 8.0 here to roughly reflect offchain revenue not captured
LDO: Business 7.1, $567M fees / $35M revenue; Accrual 3.9: up to $10M/yr of LDO buybacks (NEST cap)
ORCA: Business 5.2, $86M fees / $11M revenue; Accrual 3.9: 20% of Orca's 12% protocol fee (2.4% of swap fees) buys ORCA
ENA: Business 3.8, $226M fees / $0.5M revenue; Accrual 3.8: 20% of protocol revenue buys ENA at the top fee-switch tier ($20B USDe). Not currently active
JTO: Business 5.1, $114M fees / $7M revenue; Accrual 3.5: 80% of JTX trading fees buys and burns JTO, but staking + MEV fees (the main business) don't go to JTO
MORPHO: Business 3.9, $243M fees / $0 revenue; Accrual 0.2: 0%, fee switch off
KMNO: Business 4.7, $55M fees / $7M revenue; Accrual 0.1: 0%, no buyback or distribution
Additional Notes:
• The methodology aims to represent 1) business size and 2) accrual, measured not by the absolute dollar figure of buybacks but by the strength and alignment of the buyback program itself. Lighter or Aero putting 100% of revenue to buybacks, for example, is up there
• Fees/revenue numbers in the protocol descriptions are from DefiLlama, so they only capture onchain data. That's mostly adequate, but for protocols w/ major offchain revenue, like Chainlink, it's not the full picture
• There are a lot of simplifications and assumptions here. The biggest is assuming all buyback programs are running at full, even Aave's $50m program, which has been paused for a while and may be reduced to $30m when reactivated - for instance $HYPE
