727 FinanceRaydium surges 178%: an in-depth analysis of top projects' dividend growth and token price trends, teaching you how to screen DeFi tokens that outperform the broader market.
Written by: The DeFi Edge
Compiled by: Luffy, Foresight News
Bitcoin has been range-bound for two months, but many DeFi tokens have not lain flat with the broader market at all.
After Bitcoin surged 21% in August, it entered a box range. Starting August 22, Bitcoin's daily closing price has consistently fluctuated between $75,600 and $86,600. During this period, Bitcoin rose 5.6% overall, while Ethereum instead fell 2.7%.
Among the 19 leading DeFi tokens we tracked that distribute dividends to token holders, 14 outperformed Bitcoin. Among them, Raydium rose 178%. The median gain for this group of tokens reached 12.9%, more than double Bitcoin's gain.
Why focus on "actual returns distributed to holders"?
Looking only at total protocol revenue can be misleading. Some protocols earn a lot of money but do not distribute a single cent to token holders; the returns may ultimately be taken by the team.
Therefore, this article tracks "actual returns distributed to holders": including token buyback and burn, fee burning, and returns paid directly to token holders. This methodology comes from DeFiLlama.
To be included, a token must meet the following conditions:
Only core DeFi projects are counted: DEXs, perpetual contracts, lending, collateralized debt positions, liquid staking, yield tools, and yield aggregators. Public chains, oracles, and launchpads are not included in the scope (including Pons, etc.).
As of August 22, market capitalization exceeded $100 million.
In the past year, there has been a record of distributing returns to token holders.
All projects meeting the screening criteria are included in the statistics. For example, Raydium uses money earned from its Launchpad business to buy back tokens, and Hyperliquid directly burns fees; both types count as actual returns to token holders.
The statistical period is August 22 to October 20, compared with the previous 59 days of data. Price source: CoinGecko. Ultimately, 19 tokens were selected.
In the table, "Market Cap / Annualized Holder Return" refers to dividing total market capitalization by all returns distributed to holders over one year at the current return level. The lower the value, the lower the cost investors pay for each dollar of dividends.
Which tokens performed best?
The tokens were divided into two groups for comparison: in the group with dividend growth, the median token gain was 18.3%; in the other group, it was only 6.9%.
The top three tokens all have clear return growth logic:
Raydium: On September 5, tokenized stock issuance platform StonkFun integrated with Raydium's LaunchLab. RAY token buybacks surged from $360,000 in July to $3.94 million in September, an 11x increase.
Uniswap: The fee dividend mechanism had already been activated, and Robinhood Chain brought massive trading volume. In September, nearly half of Uniswap's protocol revenue came from this public chain.
Aerodrome (AERO): After the merger of Aerodrome and Velodrome, token holders can receive trading fees as well as fees paid by various projects to purchase liquidity. In September, this revenue reached $14.9 million, already exceeding the $10.5 million paid to liquidity providers.
The reverse also holds true: edgeX's actual returns distributed to holders fell 15%, and its token price plunged 22%, making it the worst performer in the sample.
Does low valuation equal a good opportunity? This time the data gives a different answer, and the result is quite surprising. AERO had the lowest valuation multiple at only 8.7x, and its token price surged 77%; edgeX had a valuation of 15x, the second lowest in the sample, yet its performance ranked last. Looking only at valuation level simply cannot predict subsequent token price movements.
There are also some tokens that do not fit the above pattern.
Hyperliquid (HYPE): Returns distributed to holders surged 79%, but the token price rose only 6%. Its valuation based on fully diluted valuation (FDV) is as high as 85x; about $800 million worth of HYPE unlocks and flows out every month, but monthly buybacks amount to only $75 million, so the market needs to absorb enormous selling pressure.
Sky (SKY): On August 13, a governance vote passed to use 55% of each period's revenue to buy back tokens and distribute 45% to staking users. Holder returns nearly quadrupled, but the token price rose only 11%.
Aave (AAVE): After the rsETH security incident, Aave suspended token buybacks and distributed no dividends to users during the statistical period, yet the token price still rose 24%.
I believe market pricing considers both the current dividend level and expectations for future returns. Dividend expectations are not the only factor affecting token prices.
If Bitcoin enters another range-bound period, how should DeFi tokens be selected?
When using projects for research, all three of the following points must be examined; none can be omitted:
The actual returns the project distributes to token holders are already rising.
There must be real positive drivers: for example, launching new businesses, enabling fee dividends that bring more trading volume, or events such as protocol mergers.
Be sure to check token unlocks and FDV fully diluted valuation. Hyperliquid is a cautionary tale: once a large number of tokens unlock and are released into the market, token price gains will be suppressed.
Some additional notes
This sample includes only 19 tokens over a 59-day statistical period, so the conclusions are not absolutely convincing. With one more month of data, the rankings of mid-tier tokens could very likely be completely rewritten.
Token prices and dividend returns are measured over the same two-month period. This method is only an observational indicator and does not mean that on August 22 this rule could precisely select tokens that would rise.
The valuation multiples in this article are calculated using circulating market capitalization. Many projects have large amounts of locked tokens, which can make valuations appear cheaper than they actually are. Hyperliquid's valuation calculated by circulating market capitalization is 19.6x (circulating market cap $18.1 billion), while calculated by FDV it is as high as 85x (FDV $77.8 billion).
Holder return data comes from DeFiLlama. The data cannot be 100% accurate, but it is already the highest-quality data source in the industry.
Some projects distribute dividends in batches. For example, Lido's buybacks are executed uniformly after a DAO vote; a low return in a certain month does not mean the project has stopped distributing dividends.
Meteora was not included in the two-group gain comparison because the project's dividend function had just launched and there was no historical data for comparison.
THORChain's holder returns come from burning RUNE tokens with fees. On September 12, the burn ratio was lowered from 5% to 1%, so its token price fluctuations are unrelated to the dividend growth logic.
Supplementary data on anomalous samples. Hyperliquid distributed a total of $146.9 million in returns to holders during these 59 days, accounting for 59% of the total returns of all samples; the team unlocks about 9.9 million HYPE per month. Sky's valuation multiple fell from 98x to 28.5x.