DeFi tokens that increased the value returned to holders through buybacks, burns, or direct distributions generally outperformed during Bitcoin’s latest sideways stretch, according to an analysis by The DeFi Edge.
From Aug. 22 to Oct. 20, Bitcoin traded in a range after its 21% jump in August. Daily closes stayed between $75,600 and $86,600 over that period. Bitcoin gained 5.6% in total, while Ether fell 2.7%.
Within a sample of 19 large DeFi tokens that distribute value to token holders, 14 beat Bitcoin. The median gain for the group was 12.9%, more than double Bitcoin’s move, and Raydium led with a 178% rise.
Why the analysis focused on holder payouts
The article argues that total protocol revenue can be misleading on its own because some protocols generate substantial income without passing any of it to token holders.
Instead, the study tracked what it called real yield to holders, including token buybacks and burns, fee burns, and direct distributions to token holders. The data source for that measure was DeFiLlama.
To qualify, a token had to meet all of the following conditions:
- It had to belong to a core DeFi category, including decentralized exchanges, perpetuals, lending, collateralized debt positions, liquid staking, yield products, or yield aggregators. Layer 1 chains, oracles, and launchpads were excluded, including projects such as Pons.
- Its market capitalization had to be above $100 million on Aug. 22.
- It had to have a record of distributing value to holders at some point over the past year.
Any token meeting those filters was included. The article said Raydium counted because revenue from its launchpad business was used for token buybacks, while Hyperliquid counted because it burns trading fees.
The comparison covered Aug. 22 through Oct. 20 and used the prior 59 days as the reference period. Price data came from CoinGecko, and the final sample included 19 tokens.
Tokens with rising payouts posted stronger median returns
The table’s valuation metric, described as market cap divided by annualized holder yield, measures how much investors are paying for each dollar returned to holders at the current payout rate. A lower number means a lower implied cost for each dollar of distributions.
When the sample was split into two groups, the difference was clear. Tokens in the group with rising holder payouts posted a median gain of 18.3%. The other group posted a median gain of 6.9%.
The three strongest performers highlighted in the article each had a specific revenue-growth driver.
Raydium
On Sept. 5, tokenized stock issuance platform StonkFun integrated with Raydium’s LaunchLab. RAY buybacks rose from $360,000 in July to $3.94 million in September, an 11-fold increase. Raydium was also the best-performing token in the sample, up 178%.
Uniswap
Uniswap had already activated its fee-sharing mechanism. The article said Robinhood Chain brought in heavy trading activity, and nearly half of Uniswap’s protocol revenue in September came from that chain.
Aerodrome
After Aerodrome (AERO) merged with Velodrome, token holders became eligible for trading fees as well as payments from projects buying liquidity. That income reached $14.9 million in September, above the $10.5 million paid to liquidity providers. AERO traded at an 8.7x valuation multiple and rose 77%.
The reverse pattern also appeared in the sample. edgeX saw holder payouts fall 15%, and its token dropped 22%, the weakest performance in the group.
Low valuation alone did not predict performance
The article said the data did not support a simple conclusion that lower valuation automatically meant a better opportunity.
AERO had the lowest valuation multiple at 8.7x and gained 77%. edgeX traded at 15x, the second-lowest in the sample, yet ranked last in price performance. On that basis, the article said valuation by itself could not predict what a token would do next.
Several tokens also broke from the broader pattern.
Hyperliquid
Hyperliquid (HYPE) increased value returned to holders by 79%, but the token rose only 6%. On a fully diluted valuation basis, its multiple stood at 85x. The article said about $800 million worth of HYPE unlocks each month, while monthly buybacks total only $75 million, leaving the market to absorb heavy supply.
Additional figures in the article showed Hyperliquid distributed $146.9 million to holders over the 59-day period, equal to 59% of total holder payouts across the full sample. The team unlocks about 9.9 million HYPE per month. Using circulating market cap, Hyperliquid traded at 19.6x on a circulating valuation of $18.1 billion. On an FDV basis, the multiple rose to 85x on an FDV of $77.8 billion.
Sky
Sky (SKY) passed a governance vote on Aug. 13 to allocate 55% of each period’s revenue to token buybacks and 45% to stakers. Holder payouts nearly quadrupled, but the token gained only 11%. The article added that Sky’s valuation multiple fell from 98x to 28.5x.
Aave
After the rsETH security incident, Aave (AAVE) paused token buybacks. It distributed nothing to users during the measured period, yet the token still rose 24%.
The author wrote that market pricing reflects both current payout levels and expectations for future revenue, and that payout expectations are not the only factor behind token prices.
What to watch if Bitcoin stays range-bound again
The article proposed three points for evaluating DeFi tokens during another period of sideways Bitcoin trading:
- Whether the value actually returned to token holders is already rising.
- Whether there is a concrete driver, such as a new business line, fee sharing that lifts trading activity, or a protocol merger.
- Whether token unlock schedules and fully diluted valuation are manageable. Hyperliquid was cited as an example where large unlocks can cap price gains.
Limits of the sample and other notes
The article said the sample covered only 19 tokens over 59 days, so the findings should not be treated as definitive. With one more month of data, rankings among mid-tier tokens could change materially.
It also noted that price performance and holder payouts were measured over the same two-month window. The framework is an observational tool, not a rule that could have precisely identified winners on Aug. 22.
The valuation multiples in the article were based on circulating market capitalization. For many projects, large locked allocations can make a token appear cheaper than it really is.
Holder payout data came from DeFiLlama. The article said the figures are not perfectly accurate, but remain among the best available industry data.
Some projects distribute value in batches. Lido was cited as an example because its buybacks are executed after DAO votes, so a weak month does not necessarily mean distributions have stopped.
Meteora was excluded from the two-group return comparison because its payout feature was launched recently and lacked historical data.
THORChain’s holder yield comes from burning RUNE through fee destruction. On Sept. 12, the burn ratio was cut from 5% to 1%, and the article said its price swings were unrelated to the payout-growth logic discussed elsewhere.
The piece was written by The DeFi Edge and carried by TechFlowPost with translation credit to Luffy of Foresight News.
