Data Observation on Top Six Crypto Protocols: Revenue Continues to Grow, Why Are Token Prices Not Rising?

Author: Castle Labs

Compiled by: TechFlow

TechFlow Editor's Note: Total revenue for crypto protocols in the first half of this year reached $7.42 billion, yet most tokens failed to outperform the protocol fundamentals. Investors are shifting from gambling to truly examining product revenue distribution and token value capture mechanisms, rather than blindly chasing gains. This article breaks down the revenue sources, distribution methods, and token emission pressures of six major protocols, revealing why high revenue does not equal token price increases—this is the issue every token holder needs to understand right now.

Since the beginning of this year, crypto protocols have cumulatively generated $7.42 billion in revenue.

Figure: Net token value flow for six major protocols in the first half of 2026 (holder income minus token emissions), Hyperliquid had a net inflow of $98.67 million, Sky had a net outflow of $25.03 million. Source: Castle Labs.

Even though the numbers are astonishing, most tokens in the crypto space still fail to reflect the success of the protocols.

Not all revenue is created equal.

This is a problem embedded in the industry from the start, but the situation is changing, and the questions investors ask when evaluating tokens are evolving. They are beginning to focus on product revenue generation, expenditures, and holder value capture, marking a shift from speculative gambling to true investment.

Most of the time, holders want to find answers to the following questions:

How does the protocol generate revenue, and is this sustainable?

How do they distribute revenue? Can holders derive value from it?

How much token value is used for emissions, including inflation, unlocks, and incentives?

Are there equity distributions that grant greater rights than existing holders?

Answering these four questions determines the weight of a project in the eyes of investors, but most projects cannot provide clear answers. Each token has a different value capture mechanism, and some have no mechanism at all. Even where direct value sharing exists, token performance may not meet expectations.

Take PumpFun as an example: Since the token launch, the protocol has generated approximately $450 million in revenue (one-year timeframe), but the token has fallen endlessly, due to multiple factors including token unlock speed, failed airdrop expectations, and more.

Figure: Daily revenue (orange) vs. token price (cyan) trend for Pumpfun since the PUMP token launch, showing continuous divergence between revenue and price. Source: Castle Labs.

This article focuses on analyzing the different ways major protocols generate and distribute revenue, considering emission and incentive factors, to show the details investors should pay attention to when evaluating protocols or tokens.

Crypto Revenue Sources and Distribution

Before discussing holder value capture, the fundamental question is quantifying the revenue generated by major products and its distribution method. This analysis examines six protocols (Aave, Aerodrome, Hyperliquid, Pump, Sky, Uniswap), which generated a total of $726 million in revenue in the first half of 2026.

While higher revenue may be a sign of a sustainable business, looking at this number alone is not enough. First, to account for short-term volatility, it is best to measure revenue across different timeframes to assess sustainability, so below we also compare revenue from Q1 and Q2 2026 and measure the change between them. For most protocols, the change is negative, reflecting weaker performance in Q2 due to overall market conditions.

Figure: Revenue comparison for six major protocols in Q1 vs. Q2 2026, only Uniswap achieved positive quarter-over-quarter growth (+26.94%), overall revenue dropped from $394 million to $332 million. Source: Castle Labs.

Turning to revenue sources, Hyperliquid's revenue comes from trading fees on its perpetual contract exchange (native + HIP-3), spot market, code auctions, priority fees, and HyperEVM gas fees.

Aerodrome is a decentralized exchange (DEX) that generates revenue through trading fees and external voting incentives (bribes). Similarly, Uniswap charges fees on transactions as its revenue source.

Sky generates revenue through different products: stability fees on collateralized DAI/USDS loans, liquidation penalties, Peg Stability Module (PSM) trading fees, and interest earned from Direct Deposit Modules (D3Ms) and Real World Assets (RWAs).

Continuing the list, Aave generates revenue from interest rate spreads (paid by borrowers), flash loans, liquidation penalties, and stability fees on its native GHO stablecoin. Pumpfun generates revenue from trading fees and graduation fees charged when newly created tokens reach target market caps.

After clarifying the revenue sources of these protocols, we now compare them with token emissions to explore whether and how they balance. Although protocol holder income may be high, if token emissions are equally higher, the significance of the value capture process diminishes. A protocol may have $100 million in revenue, but if it achieves this by minting $200 million in tokens annually, the meaning of this number is completely different. Additionally, token emissions are also important because they show how much value flows to inflation, team or investor token unlocks, and most importantly, incentives.

Figure: Comparison of token emissions (orange bars) and proportion of revenue distributed to holders (cyan line) for six major protocols, Hyperliquid distributes 100% of revenue to holders. Source: Castle Labs.

Revenue distribution for most protocols is usually split between holders and the treasury. Specific details depend on the specific protocol mechanisms and the governance handling such distribution.

To demonstrate how emissions affect tokens, we subtract emissions from holder income. For Aerodrome, Sky, and Uniswap, the net token flow becomes negative after this, even though there is revenue distributed to holders, indicating that these protocols emitted more tokens to maintain current revenue levels, reducing the net value flowing to holders.

Figure: Net token value flow for six major protocols over the past 180 days, calculated as holder income minus token emissions. Source: Castle Labs.

Currently, holders capture value through two main methods: buybacks and fee distribution.

Buybacks are one of the simplest ways for projects to distribute value to holders, albeit indirectly, by using revenue to purchase tokens and burn them.

Buybacks often return tokens to the protocol treasury for future incentives or staking rewards; for example, Aave transfers repurchased tokens into the treasury.

For greater consistency, most protocols burn these assets, reducing supply. For example, Lighter burned approximately 15.6 million LIT tokens obtained through revenue (6.6% of supply), worth $36 million.

Figure: On-chain record of Lighter transferring 15.6387 million LIT (approximately $36.125 million) from the treasury to the burn address. Source: Castle Labs.

Hyperliquid executes buybacks and burns programmatically, having burned over 47 million HYPE tokens to date, accounting for approximately 4.72% of its supply. Uniswap executed a 100 million UNI token burn in December 2025, cumulatively burning 107 million UNI tokens to date (approximately 11% of total supply), sourced from its enabled fees.

Burns are not available for all tokens, and the execution method of burns is very subtle. For example, BNB previously conducted quarterly burns. However, these were often not as effective as users expected because they burned non-circulating tokens, thus having no practical impact on market dynamics. Users must check the burn details: where are the tokens burned from? Circulating supply or non-circulating supply?

Each project executes buybacks differently. Maple Finance holders recently voted through a buyback plan that scales with revenue, allocating more to holders as revenue grows. This is an update to its MIP-019, which previously allocated 25% of revenue to buybacks. Based on the average revenue of $1.15 million in the first half of 2026, the buyback will shrink to 10%, which may not be the best news for holders, but the proposal passed with 99.97% approval.

Figure: Maple Finance MIP-021 plan to stepwise increase buyback ratio based on monthly revenue, buyback ratio rises to 30% when monthly revenue exceeds $2 million. Source: Castle Labs.

Additionally, holders can choose to stake tokens into the protocol and earn staking yields from the treasury. After the recent tokenomics update, Lighter's target staking yield is 6%, calculated at the current staking level of 125 million tokens, 7.5 million LIT tokens will be distributed annually.

Similarly, over 430 million HYPE is staked, earning yields from future emission reserves, estimated at 2.1%.

Buybacks and burns themselves cannot save projects from downward tokenomics or revenue declines and should be considered within the broader framework of buyers and sellers for each protocol. However, they can be used to drive ecosystem growth and guide liquidity, while slowly decreasing over time, leaving room for organic growth. Burns have similar mechanisms and can utilize platform activity to counter inflationary tokenomics.

Fee Distribution

Other protocols, such as Aerodrome and Curve Finance, use the ve tokenomics (Ve) model to distribute fees directly. In this model, holders stake tokens and convert them into vote-escrowed tokens (e.g., veAERO or veCRV).

It creates economic value for holders through different mechanisms:

Protocol trading fees: These protocols distribute 50-100% of fees to ve token holders.

Boosted yields: Holding these tokens also increases yields for liquidity providers (LPs) in these exchange pools.

Bribes: Protocols pay cash incentives to ve holders in exchange for their governance votes, directing future rewards to specific liquidity pools.

The actual characteristic of Ve protocols is inherent design driving strong emissions, which partly explains their high fee distribution growth achieved through inflation.

Using these methods, these protocols have generated over $2.75 billion in holder income to date, driven mainly by Hyperliquid and Uniswap (due to the 100 million UNI burn in December 2025).

Figure: Cumulative revenue distributed to holders by six major protocols has exceeded $2.75 billion, with Hyperliquid and Uniswap contributing the major share. Source: Castle Labs.

But as we mentioned, value capture alone is not enough; emissions also need to be balanced.

In the next section, we explore other reasons that may hinder token growth besides holder income and emissions.

The Beautiful Trap of Tokens

Over time, crypto products have grown and generated considerable revenue, but revenue does not necessarily mean tokens will perform better.

Tokens for most revenue-generating products perform poorly, for reasons including the following:

Revenue does not flow to tokens: Even if protocols generate meaningful revenue, this value often stays in the treasury rather than flowing to holders. How buybacks are used is important. Treasury retention is discretionary and depends on the protocol. Since there is no contractual obligation, protocols can pause, adjust, or cancel buybacks at any time. Although there is governance behind these decisions, most voting power is controlled by the project team.

Existence of equity-token separation, making holders second-class citizens: More and more companies are now adopting dual equity and token structures. A typical example of such tokens is XRP. Ripple Labs stock has performed well since 2025, rising 105%, while the XRP token fell 45% over the same period. They issue tokens and equity, but since holders have no specific rights to company revenue, there is no value capture. In contrast, equity holders obtain this value and perform well.

Higher unlock speeds increase expected selling pressure: Even if revenue sharing exists, faster supply unlock schedules will suppress the token, as explained above when discussing token emissions. Another aspect is the low circulating supply and high FDV nature of tokens, because a large supply still needs to be unlocked and absorbed by the market, which may effectively lower the protocol's P/S ratio, making it look "cheap," but in reality, circulating supply shocks are expected to become part of emissions in the future.

Figure: Circulating supply as a percentage of Fully Diluted Valuation (FDV) for six major tokens, HYPE is only 23.28%, Sky is as high as 99.63%. Source: Castle Labs.

Combining these factors reflects the true nature of tokens and explains price trends in most cases, although there may be other factors affecting their performance.

The PUMP token has fallen 60% since launch, despite the project completing over $315 million in buybacks. On the other hand, HYPE has risen 1400% since launch and returned $1.2 billion to shareholders through buybacks. Both continue to conduct buybacks, but PUMP price is unsatisfactory, due to lack of communication from the team, no airdrop, fast unlocks, and market selling of the token.

The AAVE token has struggled since the beginning of this year, completing $45 million in buybacks since launching the buyback program in April 2025 (currently paused due to the Kelp DAO incident), this is caused by multiple factors, including DAO service providers like BGD Labs and ACI leaving, as well as the impact of the Kelp DAO incident on Aave and increased institutional competition from Morpho.

Figure: Relative price performance of HYPE, UNI, AERO, Aave, Pump, Sky, HYPE significantly outperformed, most others near or below launch levels. Source: Castle Labs.

In the case of Aave, they also lost over $23 million while executing these buybacks due to asset price declines. Their average purchase price for AAVE was $182, while the current trading price is around $90, indicating that buybacks may not be the optimal path.

However, buybacks remain one of the most consistent solutions for tokens to accumulate value, because they can be tracked on-chain, and protocols must purchase assets from the market, creating buy pressure supported by revenue. Therefore, it establishes a direct positive link between protocol success growth (more revenue) and improved, more deflationary tokenomics (lower inflation). For crypto holders, this may be the optimal way to ensure consistency between protocol and token. But as the Aave case shows, their purchases lost 50%, eroding value created through project success.

On the surface, dividends seem like a better option, because users can earn stablecoins pegged to the tokens they hold and can dispose of them freely. However, unlike buybacks, this has no direct impact on token price, making the choice between the two somewhat difficult and highly context-dependent. If protocols distribute fees, then their tokens may become useless (unless they have other value or utility). The counterargument is that due to the existence of dividends, more people will want to invest in a certain token.

As of today, most projects are conducting buybacks, indicating they believe buybacks are more valuable.

Conclusion

Multiple protocols are earning considerable revenue, but not all protocols accumulate value for tokens in the same way. Even if they do, it does not necessarily lead to asset price increases, because there is usually enough selling pressure, from unlocked tokens held by insiders, negative news, incentives, overall sentiment of the project, and the competitive landscape.

Looking at these different nuances individually only tells a small story. Instead, investors should conduct a broader analysis, including how protocols generate revenue, how they distribute revenue, and how they balance between final emissions and incentives.

The first step for any protocol should be to become a successful business and generate revenue. Then, it should ensure it accumulates value for token holders in some way, whether through buybacks, dividends, or automated fee distribution.

In the case of Hyperliquid, we have witnessed how protocols with strong tokens and value accumulation processes perform excellently when consistency is embedded from genesis. It distributes most of its revenue to holders, and other projects like Aerodrome and Uniswap are following suit.

Protocols are increasingly realizing that good tokens require good distribution, so we expect more consistency between protocols and users, and token holders will win more.

The broken chain between protocol revenue and token performance ultimately points to a simple conclusion: good protocols do not equal good tokens, only when revenue, distribution, and emissions are all seriously examined can holders truly share in the growth dividends.