TLDR
- Uniswap introduces a fee switch to distribute revenue to UNI holders.
- Aave routes surplus revenue into buybacks and ecosystem reserves.
- Ethena’s stablecoin system turns fees into yield for token holders.
- September DeFi revenue doubled to $600M, driven by Uniswap and Aave.
Decentralized Finance (DeFi) has seen a notable resurgence in revenue, with total earnings reaching approximately $600 million in September. This marks a significant recovery from earlier lows, largely driven by major players like Uniswap and Aave. Both protocols have shifted their strategies to focus on token design and actively returning value to token holders, signaling a new era in DeFi’s revenue structure and its potential long-term sustainability.
Uniswap’s Fee Switch Plans
Uniswap, one of the largest decentralized exchanges in the cryptocurrency space, has been a key contributor to the DeFi revenue increase. In 2025, its governance approved $165 million in foundation funding to support future growth.
A major component of Uniswap’s plans is the introduction of a “fee switch” mechanism. This feature, set to be implemented with the v4 rollout, will allow a portion of trading fees to be distributed directly to UNI token holders.
The move aims to better align the interests of users and token holders, providing a more direct financial benefit for those who hold UNI tokens. This strategy is expected to enhance the overall value proposition of holding UNI, potentially driving further engagement with the protocol. While the details of the fee distribution are still to be fully realized, the direction is clear: Uniswap is working to integrate a sustainable revenue-sharing model with its community.
Aave’s Buyback and Ecosystem Reserve Framework
Aave, another prominent DeFi platform, has taken a different approach to revenue distribution. The protocol implemented a framework to direct surplus revenue into regular buybacks and an ecosystem reserve. This policy aims to recycle earnings back into the AAVE token, thus strengthening the connection between protocol usage and token value.
By focusing on consistent buybacks, Aave hopes to reduce price volatility and create a more predictable environment for token holders. The move is part of a broader effort to foster long-term growth and stability within the ecosystem. Aave’s strategy stands out by offering a more systematic method for improving token value compared to one-off treasury actions, which have been common in other DeFi protocols.
Ethena’s Yield-Driven Model
Ethena, a newer player in the DeFi space, has taken an innovative approach to revenue distribution. Rather than focusing on buybacks or fee switches, Ethena’s model converts fees into yield, which is then distributed directly to holders of its USDe and sUSDe stablecoins. This system has helped Ethena gain traction, particularly as its total value locked (TVL) grows.
The integration of Ethena’s model with other DeFi platforms like Aave and Pendle has contributed to its increased earnings. As a result, Ethena now ranks among the top generators of distributable revenue in the DeFi sector. Its simple yet effective model is designed to offer holders a steady stream of passive income, making it an attractive option for those looking to capitalize on stablecoin yields.
Questions About Sustainability
Despite the impressive revenue figures, questions remain about the long-term sustainability of these fee increases. A key concern is whether trading volumes will continue to sustain the higher fee levels, or if fluctuations in the market could cause revenue to decline. Furthermore, as the distribution of tokens grows and new participants enter the space, the effectiveness of these strategies could be diluted if not managed carefully.
While Uniswap, Aave, and Ethena have successfully implemented mechanisms to tie their earnings to token performance, the volatility of the DeFi market means that future growth is not guaranteed. As the sector evolves, ongoing adjustments will likely be necessary to maintain the balance between platform revenue and token value.
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