DeFi Sector Jumps 38% as US Policy Shift Unlocks Token Value Capture

DeFi tokens have climbed 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 DeFi closer to a market where fees, buybacks and on-chain activity can play a larger role in how tokens are valued.

Policy Shift and Protocol Revenue Behind the Rally

In a post on X, SoSoValue said its 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 that investors are also reassessing whether mature DeFi protocols can return more of their revenue to tokenholders.

That issue has limited DeFi valuations for years. Protocols could generate substantial trading fees, lending income, and other revenue while tokenholders had little direct claim on those economics.

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. But that may be changing, considering that last week, the SEC proposed its “Regulation Crypto Assets” framework, which includes exemptions and a conditional safe harbor for certain crypto-asset offerings.

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