DeFi tokens have climbed nearly 38% since August 17, and research firm SoSoValue says the rally reflects growing bets that protocol revenue could start flowing to tokenholders. Last week the SEC separately proposed a new framework that could ease securities-law concerns around token buybacks and fee distributions.
DeFi tokens have risen nearly 38% since August 17, as investors reassess how US crypto policy could affect protocol revenue and token value. SoSoValue says the rally is moving the sector closer to a market where fees, buybacks, and on-chain activity play a larger role in how tokens get valued.
SoSoValue's DeFi sector index, $DEFI.ssi, rose from 0.3616 on August 17 to around 0.498 after reaching 0.511, for a cumulative gain of about 37.7%. The move came alongside Bitcoin and Ethereum's recovery and broader short covering, but the research firm argues investors are also reassessing whether mature DeFi protocols can return more of their revenue to tokenholders.
This issue has limited DeFi valuations for years. Protocols could generate substantial trading fees and lending income while tokenholders had little direct claim on those economics, and fee distributions and buybacks could also create securities-law concerns in the US, leaving many protocols reluctant to activate mechanisms that tie revenue to their tokens.
However, that may be changing. Last week, the SEC proposed its "Regulation Crypto Assets" framework, which includes exemptions and a conditional safe harbor for certain crypto-asset offerings. Under the proposal, once a project has completed or permanently stopped the essential managerial work it had promised, its token may no longer remain part of an investment contract.
Source: CryptoPotato
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