Fundamentals Szn?

While narrative and sentiment certainly play a huge role in short-term price action for tokens, this cycle's tides seem to be shifting back to fundamentals.

Short-term price movements for tokens are undoubtedly influenced by narrative and sentiment. However, this cycle’s tides seem to be shifting back to fundamentals.

There’s a consensus forming around the fact that the upside for many of the most hyped token drops was already captured long ago when VCs signed their token warrant deals. This building disillusionment, with multiple tokens launching with fully-diluted values (FDVs) above $10B, has been a driving force in the rise of memecoins this cycle. While memecoins may only have value as long as they capture attention, at least they don’t have swaths of tokens squirreled away to be dumped on the market at later dates.

In the past month, older, revenue-generating protocols with most of their tokens already in circulation have also caught a bid. While this may be partially due to the inflow of institutional interest this cycle, there’s value in keeping a close eye on tokens with solid fundamentals, whether they be revenue-generating, have most of their tokens unlocked, or, ideally, have both of those properties.

This article will do just that, mapping out protocols and their tokens in all three categories to identify which may attract fundamental-focused investors. This list of 23 tokens is far from exhaustive, but we think there’s still plenty of value below. ?

? Revenue-Generating & Mostly Unlocked

▪️ Lido: The largest liquid staking provider, with 29% of the total market share, Lido Finance has remained a key player in the Ethereum staking ecosystem. Over the past year, it generated $91M in revenue, with 100% of its tokens unlocked, 89% of which are in circulation.

While its market share had declined since 2023, when it staked one of every three ETH, its recent launch of the Lido Alliance, an initiative focused on making stETH a cornerstone of restaking, returned it to 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 to Lido staking, returning deposits to an uptrend after its peak and subsequent decline from February through May — in turn boosting the protocol’s revenue. Lido earns its keep by charging a 10% fee on staking rewards, which it keeps half. Lido is up 21% over the past week.

▪️ MakerDAO: Established in 2014, MakerDAO, the lending protocol and issuer of decentralized stablecoin DAI, has earned $271M in revenue over the past year, with 92.5% of its supply unlocked and in circulation

Over the past year, Maker has doubled down on its integration of RWAs, opening vaults for minting DAI against U.S. Treasuries and allocating funds from its treasury to the purchase of U.S. Treasuries and corporate bonds — an investment which has paid off handsomely, generating at times half of its total revenue. Currently, MakerDAO's RWA holdings exceed $2.2B. To expand on this, they have also announced the Spark Tokenization Grand Prix, an open competition to invest $1B in tokenized U.S. Treasury products, for which BlackRock, Securitize, and Ondo have all expressed their interest in participating. This will further increase their revenue, which they generate from borrowing fees, liquidation fees, and, of course, RWA deposits and holdings. Maker is up ~25% over this past week.

MKR is the most under appreciated token in crypto but will not be for long-

Captures nearly 40% of all DeFi profits on Ethereum- #3 crypto app in revenue behind ETH, SOL

- Largest holdings of RWAs of any protocol, Blackrock et al competing for allocation of portfolio

- Trades… pic.twitter.com/oJLTCH6Jlx

▪️ Aave: Over the past year, Aave, crypto’s largest decentralized lending market, has earned $55M in revenue, with 91% of its tokens unlocked, 93% of which are currently in circulation.

Beyond having $13.7B in TVL, Aave’s codebase also accounts for 75% of the value in DeFi lending protocols, meaning many other protocols have forked or incorporated its code into their projects. In May, Aave unveiled its plans to launch its v4 within 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, scaling Aave into a fully cross-chain liquidity protocol. Further, it plans to launch the Aave Network chain, which will serve as the hub for the protocol and its GHO stablecoin. Like Maker,