Author: David C, Bankless; Translated by: Deng Tong, Golden Finance
While narratives and sentiment do play a huge role in the short-term price action of tokens, the tide seems to be returning to fundamentals in this cycle.
There is a consensus that the upside to many of the most hyped tokens falling was captured long before VCs signed token warrant deals. This deepening disillusionment, along with multiple tokens being issued at over $10 billion in fully diluted value (FDV), has been the driving force behind this round of memecoins rising. While memecoins are only valuable if they attract attention, at least they don’t have a large number of tokens stashed away to be dumped on the market at a later date.
Older revenue-generating protocols with a majority of tokens already in circulation have also seen bids over the past month. While this may be partially due to the influx of institutional interest this cycle, there is value in keeping an eye on tokens with solid fundamentals, whether they are revenue-generating, have a majority of tokens unlocked, or ideally both.
This article will do just that, mapping out protocols and their tokens across all three categories to determine which ones might appeal to fundamentals-focused investors. This list of 23 tokens is far from exhaustive, but we think there’s still a lot of value below.
Profitable and mostly unlocked
Let’s take a deep dive into a few of the most important coins that fit into this category. There are others out there! But these are the most recognized ones.
Lido:
Lido Finance is the largest liquidity staking provider with 29% of the total market share and has been a key player in the Ethereum staking ecosystem. In the past year, it has generated $91 million in revenue, with 100% of its tokens unlocked and 89% in circulation.
While its market share has declined since 2023, when it staked a third of all ETH, its recent launch of the Lido Alliance, an initiative to make stETH a cornerstone of restaking, has put it back on center stage. Symbiotic, a multi-asset restaking protocol backed by Lido’s founders and part of the Lido Alliance, and Mellow Finance, a stETH-centric restaking service also part of the Lido Alliance, have restored momentum in Lido staking, with deposits back on an upward trend after a peak in February-May and subsequent decline — boosting the protocol’s revenues. Lido makes a living by charging a 10% fee on staking rewards, keeping half of that for itself. Lido is up 21% over the past week.
MakerDAO:
MakerDAO, founded in 2014, is a lending protocol and issuer of the decentralized stablecoin DAI. In the past year, MakerDAO has generated $271 million in revenue, with 92.5% of the supply unlocked and in circulation.
Over the past year, Maker has doubled down on RWA integration, opening vaults, minting DAI with US Treasuries, and setting aside funds from the vaults to buy US Treasuries and corporate bonds - an investment that has paid off handsomely, at times accounting for half of their total revenue. Currently, MakerDAO's RWA holdings exceed $2.2 billion. In an effort to further scale, they also announced the Spark Tokenization Grand Prix, an open competition to invest $1 billion in tokenized US Treasury products, with BlackRock, Securitize, and Ondo all expressing interest in participating. This will further increase their revenue, which comes from borrowing fees, liquidation fees, and of course, RWA deposits and holdings. Maker is up about 25% over the past week.
Ghost:
Aave, the largest decentralized lending market in the crypto space, has generated $55 million in revenue over the past year, with 91% of its tokens unlocked, of which 93% are currently in circulation.
In addition to having $13.7 billion in TVL, Aave’s codebase accounts for 75% of the value of DeFi lending protocols, meaning that many other protocols have forked or incorporated its code into their projects. In May, Aave unveiled its plans to launch its v4 in three years, featuring a unified cross-chain liquidity layer powered by Chainlink’s Cross-Chain Interoperability Protocol (CCIP). This will allow borrowers to access instant liquidity across all supported networks, expanding Aave into a fully cross-chain liquidity protocol. Additionally, it plans to launch the Aave Network chain, which will serve as a hub for the protocol and its GHO stablecoin. Like Maker, Aave generates revenue in a variety of ways, including interest for borrowers, fees for liquidations and flash loans (loans repaid within one transaction block), interest for depositors, and through GHO, all interest is paid directly to the Aave DAO treasury. Aave is up about 10% over the past week.
Projects that generate substantial income
In the past year, several new and old projects have achieved significant revenue by bringing innovation to the market or carving out their own niche. These projects include:
Jito (JTO): In addition to taking nearly half of Solana’s LST market share, the liquidity staking protocol with MEV boosting rewards has generated $176 million in revenue over the past year.
Ethena (ENA): Despite only launching in late February this year, Ethena, the Ethereum-based protocol behind the delta-hedged stablecoin USDe, has already generated $92.7 million in revenue.
Aerodrome (AERO): Launched in 2023 by the Velodrome team, the top DEX on Base has earned $90.7 million in revenue over the past year, driven by the success of L2.
dYdX (DYDX): Operating on its own chain, dYdX is a non-custodial trading and derivatives protocol that has generated $55 million in revenue over the past year.
Pancake Swap (CAKE): BSC’s favorite DEX, originally forked from Uniswap and launched in 2020 by an anonymous team, has generated $50.7 million in revenue in the past 365 days.
Uniswap (UNI): The largest and most popular DEX in the EVM, deployed on 11 chains and generating ~$42M in revenue over the past year.
Banana Gun (BANANA): The popular Telegram trading bot on Ethereum, Blast, Base, and Solana generated $34.7 million in revenue last year.
Curve Finance (CURVE): Despite recent issues, the DeFi trading platform brought in $29 million in revenue over the past year.
Velodrome (VELO): Launched by veDAO members and originally a next-generation DEX on Fantom, Velodrome is a DEX that primarily runs on Optimism and has raked in $29.8 million in revenue over the past year.
GMX (GMX): The most popular DEX on Arbitrum and Avalanche, GMX had a net revenue of $32 million in the past year.
Most of the unlocked supply
As the industry continues to mature, more and more protocols have completed their token vesting plans, releasing a majority (or in some cases all) of their token supply to the open market. Projects in this category include:
Injective (INJ): Built on Cosmos’ DeFi L1, Injective has unique primitives such as a fully decentralized MEV-resistant order book with 100% unlocked and 97% circulating supply.
LooksRare (LOOKS): An anonymous NFT marketplace known for rewarding active users with LOOKS and WETH and supporting creator royalties, 100% unlocked and 99.5% in circulation.
Synthetix (SNX): Founded in 2017, Synthetix is a decentralized derivatives trading protocol on Ethereum that recently ended inflation and moved to a deflationary model with buybacks and burns. 100% of its tokens are unlocked and 99.8% are in circulation.
Mask Network (MASK): Mask is a browser extension focused on connecting Web 2.0 and Web 3.0. It integrates dApps into traditional social networks. Its tokens are 100% unlocked and 100% in circulation.
Kujira (KUJI): A survivor of the Terra collapse, Kujira spun out its own Cosmos-based L1 which has grown into a mature ecosystem with 100% of supply unlocked and 99% in circulation.
Polygon (MATIC): Polygon is one of the first ETH L2s and not only has a suite of tools for scaling Ethereum, but is also 100% unlocked with 92.8% of its tokens in circulation.
Yearn (YFI): A product of the DeFi summer of 2020, Yearn is a suite of decentralized yield products with 99.9% of tokens unlocked and 91% of circulation.
Cartesi (CTSI): Cartesi is an application-specific rollup protocol that uses virtual machines running Linux, with 93% unlocked and 82% of supply in circulation.
1inch (1INCH): The leading EVM DEX aggregator, 1inch’s tokens are 86% unlocked and 82.6% in circulation.
Liquity (LQTY): A decentralized lending protocol with 0% interest loans using ETH as collateral, Liquity’s supply is 97% unlocked, with 96.3% in circulation.
Summarize
While it’s still early days, the recent uptrend in blue-chip DeFi protocols with significant revenues and a majority of supply in circulation could signal a shift away from a hype-driven narrative and toward a focus on fundamental metrics, in part a response to disappointment with outrageous launch-FDVs this cycle.
In this cycle, fundamentally sound protocols are likely to see significant returns as the bull run continues, influenced by institutional investors and their traditional valuation processes, thus further maturing the industry and extending its longevity.
