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A Look at the Top DeFi Protocols and the Impact of Tokenomics
Osgur Murphy O Kane
Key Takeaways
12 min read
  • The report looks at the YTD price performance of some of the top DeFi coins by TVL and their respective token models.
  • There is no consistent trend to suggest which tokenomic models (governance or value accruing) is best given the huge number of factors at play.
  • There is some indication that value accrual tokenomics can support price. However, it is only one factor of many and is protocol-dependent.
  • When returning cash flow to tokenholders, a protocol should ensure it can remain competitive in doing so and it does not damage their core product.


This report examines the top tokens in the respective categories by TVL. It looks at their YTD performance in 2023 and the impact, if any, of tokenomics on a project. DeFi tokens have often been criticized as ‘valueless governance tokens’ for their lack of fundamental value or utility. The expectation of future use cases such as a fee switch (i.e. Uniswap) help major governance tokens sustain large valuations. Some tokens have incorporated various value capture mechanisms whose efficacy is controversial. This report looks at governance, ve, and buyback models.

Coins Covered

The coins covered are Ethereum-based and selected based on high TVL. The dashboard looks at the YTD performance of the coins. This period was...