Why the Billion-Dollar Revenues of Crypto Projects Did Not Lead to Token Growth

Since the beginning of 2026, cryptocurrency protocols have generated a total revenue of over $7.4 billion, according to a report by Castle Labs. However, the prices of most native tokens of these projects have not only failed to rise but have also plummeted by tens of percent.

Analysts at Castle Labs examined the financial flows of six major decentralized protocols: Aave, Aerodrome, Hyperliquid, Pump.fun, Sky (formerly MakerDAO), and Uniswap. Castle Labs determined that since the beginning of the year, their combined revenue amounted to $726 million, despite a deep bear market.

Since the beginning of the year, by August 3, the total market capitalization of the cryptocurrency market has fallen by more than 25% to $2.15 trillion. Out of the 100 largest crypto assets by market capitalization listed on Coinmarketcap, more than 80% have decreased in price. Against this backdrop, experts sought to answer the question of why there is a fundamental gap between project revenues and the price dynamics of the crypto assets they issue.

Reasons for the Decline

A key indicator in the report is the net token value flow. This metric is calculated as the volume of revenue actually distributed among holders minus the volume of token issuance (inflation, unlocking previously frozen tokens of teams and investors, marketing expenses, and other token distribution mechanisms).

Calculations show that for Aerodrome, Sky, and Uniswap, this indicator has gone negative. The protocols are issuing more tokens than they are distributing in profits to holders, effectively devaluing users' capital.

Explaining the reasons for the negative dynamics in token prices, experts also noted a trend where token holders are becoming secondary market participants. This means that the success of the company does not translate to the holders of crypto assets.

If a protocol earns $100 million but issues $200 million, the net value for the holder becomes negative, analysts at Castle Labs explain, noting that this imbalance negates the positive effect of revenue growth.

In this context, the success of the cryptocurrency exchange Hyperliquid is particularly indicative. The protocol directs 100% of its revenue to holders through a buyback mechanism. The total buyback volume exceeded $1.1 billion or over 47 million HYPE tokens (about 4.72% of the total supply). This coincided with a 1400% increase in HYPE since the launch of the buyback program.

A contrasting example is Pump.fun. The platform for launching meme coins, despite generating around $450 million in revenue over the year, faced a 60% drop in the price of the PUMP token after its launch.

Castle Labs links this to three factors: a high rate of token unlocking (it is assumed that investors and the team are actively taking profits), unrealistic expectations regarding community incentives, and poor communication from the team with market participants.

Analysts also highlighted Ripple Labs, the company behind the development of XRP (XRP). Its shares, which are not yet traded on the open market, have increased by more than 105% since 2025. Meanwhile, the XRP token has lost about 45% over the same period.

The report indicated that this is a classic example of the separation of equity and token, where XRP holders do not have rights to the company's profits. The crypto asset they issue is not backed by the operational profit of the issuer: while Ripple shareholders benefit from the business's growth, holders of the crypto asset remain second-class players.

What Prevents Growth

In addition to the fundamental imbalance between the revenues of crypto projects and the issuance of their crypto assets, Castle Labs identifies three systemic reasons that hinder token growth:

Excess Supply (Fully Diluted Value). Many protocols have a low percentage of tokens in actual circulation. For example, only 23.3% of the total issued volume of HYPE is in circulation. Analysts noted that due to this, many investment metrics are inaccurate, which can mislead investors.

Ineffective Buybacks. An analysis of Aave, as noted by experts, showed that the protocol spent over $23 million on token buybacks at an average price of $182. However, against the backdrop of a market downturn, the price of AAVE fell to $90. This indicates that the buyback of tokens resulted in direct losses for the protocol's treasury, raising doubts about the effectiveness of such a policy.

Lack of Commitments. Most buyback programs are conditional, allowing protocols to suspend or cancel buybacks at any time: Without contractual obligations, protocols can pause, adjust, or cancel buybacks at any time.

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