DeFi firms have been concerned about implementing “value accrual mechanisms” for their tokens under SEC supervision — but that could change with President-elect Donald Trump.
Decentralized finance (DeFi) tokens surged by over 30% as traders anticipate that the Trump administration will boost the “investment appeal” of holding “utility” tokens, per an industry analyst.
Among the biggest gainers on November 6 and 7 was UNI, which spiked by more than 35% to a local high of $9.58, with Lido DAO, Ethena, AAVE, and Maker also rising over 20% from recent lows, according to CoinGecko data.
Charlie Sherry, head of finance and crypto analyst at BTC Markets, explained to Cointelegraph, “Until recently, DeFi tokens have been largely labeled as ‘useless governance tokens,’ serving no value beyond voting on protocol changes.”
However, Sherry noted that recent buying activity suggests investors believe these protocols will eventually “pass value back to the token through fees earned by the protocol.”
Sherry added that many DeFi protocols have avoided implementing “value accrual mechanisms” due to concerns about potential SEC enforcement, citing the SEC’s probe into Uniswap Labs as an example.
Donald Trump won the U.S. presidency on November 6 in a landslide against Vice President Kamala Harris, which could prompt SEC Chair Gary Gensler to resign by December or January, according to 10x Research.
This change has led to “regulatory optimism,” Sherry said, with “markets now pricing in the anticipated regulatory shift, expecting a friendlier environment for DeFi projects and their tokens.”
Sherry elaborated that a “fee switch” proposal for lending protocol Aave would be a “significant step toward creating intrinsic value” for AAVE tokenholders.
Similarly, Uniswap’s layer 2 solution Unichain will allocate a portion of its fees to UNI tokenholders, potentially turning UNI “from a governance token into a utility asset,” enhancing its appeal to investors.
Protocols for LIDO, ENA, MKR, and Frax (FXS) may also adopt similar “value-accruing” changes, according to Sherry.
Meanwhile, Markus Thielen, head of research at 10x Research, suggested that DeFi tokens likely rose as traders used a “buy the laggard” strategy, focusing on assets that underperformed last year but may lead in the coming year.
Thielen also mentioned speculation that BlackRock might “promote its spot Ether exchange-traded fund more aggressively” in 2025.
He added that Ether could potentially reach $3,000 if it surpasses the $2,700 mark, as Ether is currently trading at $2,845, an 8.5% increase over the past 24 hours.
