The value capture ability of the token is a key factor affecting the long-term development of the project. How to increase the value of the token has always been a concern of the encryption community. At present, sharing the income of the protocol with the community is undoubtedly one of the effective paths. recentlyDeFi ManSummarizing the current 19 cash flow protocols that distribute protocol income to token pledgers, the PANews translation of this article is as follows.

On this issue, I believe that the encryption community has reached a consensus that tokens need to evolve from pure governance tokens to value-added tokens in order to enhance the value capture capabilities of tokens. Use the model to achieve:

• Purchase protocol tokens from the market and distribute among stakers (like xSUSHI);

• Buy protocol tokens from the market and burn them to reduce supply (like BOTTO);

• Buy protocol tokens from the market and keep them in a vault (like YFI);

• Redistribute part of the income obtained by the agreement to the holders of the agreement's governance tokens (such as GMX).

The first three methods are mainly to increase the share of each token holder in the project and provide continuous purchasing power for the token, while the fourth method provides cash flow for holders so that each holder can choose Whether to reinvest or diversify into other assets.

Today, I want to look at all the protocols that implement the 4th method (i.e. the cash flow protocol), because I believe that they are the ultimate evolution direction of the token model, because for the token holders, if the future does not receive Some kind of value, then even having a larger share has limited meaning.

I tried to be as inclusive as possible, but my analysis was certainly not exhaustive, and some great projects weren't included here, so apologies in advance, that wasn't meant to be.

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The best metric for comparing projects

In my personal opinion, overall, using a modified P/E ratio (price/earnings) metric for the crypto industry is a good way to assess which projects may be undervalued or overvalued, since it essentially calculates how many years it will take for a protocol to gain its valuation.

The commonly used calculation method is:

Sometimes market cap is used instead of FDV, but in my opinion it's not comprehensive enough as it doesn't take into account future unlocks, in the current case it's the amount and frequency of token unlocks that differentiates a really good project from a bad one .

However, this metric does not help us effectively analyze cash flow, in fact there are indeed good projects in terms of P/E metric, but these protocols never share a penny with token holders or stakeholders , or at least not yet.

With this in mind, we will use a modified version of the indicator:

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ProtoFi

ProtoFiIt is a DeFi protocol based on the public chain Fantom, which provides AMM transactions and liquidity mining with a decentralized governance model. Token ELCT pledgers will receive protocol fee dividends distributed through DAI.

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Synthetix

SynthetixIt is a well-known protocol in the DeFi field, dedicated to derivatives transactions and atomic swaps through synthetic assets. The implementation of atomic swaps has boosted protocol revenue substantially in the last month, likely due to arbitrageurs operating between SNX/CEX and greatly increasing stakers’ APR.

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Unidex

UniDexIt is an aggregation platform that provides different services such as charts, exchange, leveraged trading, and limit orders. 20% of the protocol's revenue goes to UNIDX token holders, which makes it very attractive in terms of price. They're not very big yet, so it might be difficult for the whales to get in.

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LooksRare

LooksRareLaunched in early 2022, the NFT marketplace will allow traders and collectors to buy and sell NFTs at lower fees than the leader Opensea.

This is a high-margin (2% commission) and high-volume business, and 100% of the commission is given to LOOKS stakers. If they retain market share (i.e. trading and listing rewards) at the end of liquidity mining, I believe they could end up being one of the largest cash flow protocols in the future.

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YieldYak

YieldYarkIt is a native exchange and revenue aggregator in the Avalanche ecosystem, providing part of the protocol revenue to token YAK pledgers.

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GMX

GMXIt is a decentralized exchange that allows zero-slippage exchange and perpetual contract trading based on oracle pricing. Currently, GMX is deployed in Arbitrum and Avalanche.

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Curve 

CurveIt is one of the representative projects in the DeFi field. Because of its successful business model and innovative token economics, it has been widely imitated by many protocols (ie veCRV) recently.

It has always been one of the protocols that distributes the largest fees, and I believe they will continue to be an important part of the space, even if they may have to face some challenges (i.e. stablecoin integration).

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Beefy Finance

Beefy FinanceIt is one of the leading agreements in the field of revenue aggregators, deployed on 16 chains, and has a market-leading position on many chains. The simple and effective design makes Farming easier and less time-consuming.

It was one of the first protocols to distribute fees among holders, and 97.5% of its supply is already in circulation. BIFI stakers on each chain accumulate fees generated on that chain through the agreement.

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TraderJoe

TradeJoeIt is the head DeFi protocol of the Avalanche ecosystem, providing services such as transactions, liquidity mining, and lending, and recently launched an NFT trading market. TraderJoe continuously distributes earnings to the sJOE pool (staked JOE) in the form of USDC.

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Umami

UmamiIt is an innovative project, from OHM fork to deployment of delta neutral strategy, based on GMX and TracerDAO to generate about 20% APR income.

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Trisolaris

TrisolarisThe first DEX on Aurora, the protocol pays out rewards to stablecoin (USDT, USDC) stakers.

As native protocols, their success is inherently tied to the success of the deployed chain, so I have no doubt that they will do well if Aurora gains adoption.

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Lifinity

Lifinityis an innovative Solana-based DEX that implements oracle pricing and centralized liquidity to reduce impermanent losses and achieve higher capital efficiency.

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Gains Network

Gains Networkis a decentralized perpetual protocol deployed on Polygon, allowing up to 125x leveraged trading, they use a custom oracle based AMM model instead of an order book model.

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Balancer Labs

BalancerLabsWas the first AMM to deploy an unbalanced pool instead of the 50%/50% we used in the Uniswap/Sushiswap model. It has managed to maintain their market share, even if it is nowhere near being the leader in their segment.

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Ribbon Finance

Ribbon FinanceThe first player in the option vault space and the largest player in TVL, it offers a variety of options from 20-85% APY.

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Hegic

Hegicis the first options market to be implemented on-chain, and has struggled to gain mass adoption due to poorly understood options markets and expensive gas fees on the Ethereum mainnet. I believe that if some options trading volume moves from off-chain to on-chain, they will have a chance to gain more traction.

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Metavault Trade

Metavault Tradeis a new protocol, equivalent to a fork of GMX deployed on Polygon, but with some minor changes (such as the total supply).

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BlackPool HQ

BlackpoolHQis a decentralized investment fund focused on games and NFTs that distributes rewards to veBPT holders on a weekly basis. Although their results are currently not too impressive due to the debacle of some collectibles in their portfolio (Axie, Curio Cards, Hashmasks, etc.), it's still a very interesting concept,

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Cap Finance

CapDot FinanceIt is a decentralized perpetual market based on oracle pricing deployed on Arbitrum, allowing up to 50 times leverage and 0% fees. Liquidity is provided by ETH and USDC pools, which act as counterparties, similar to the GMX model (if traders make money, LPs lose money).

1% of protocol fees is allocated to CAP stakers, but this number is prone to change in the future, so they could easily increase their ratio significantly to be more attractive to cash flow investors. Payment methods are ETH and USDC.

wait.Redacted Cartel、Perpetual Protocol、Jones Daowait.

To sum up, good token economics includes the protocol’s allocation of fees to token holders, low circulation, etc., and successful tokens are composed of good token economics, demand for products, and pricing power.