Privacy premium, protocol income and repurchase and destruction are becoming new anchors for funds.
Written by Cooper Duschang
Compiled by: Saoirse, Foresight News
Bitcoin accounts for approximately 56% of the total cryptocurrency market capitalization. Crypto market analysis has long revolved around Bitcoin’s earnings performance and its response to the macro environment. Despite its size, Bitcoin is not equivalent to the entire crypto industry.
In past bull market cycles, funds generally first flowed into blue-chip large-cap crypto assets such as BTC, ETH, and SOL, and then moved into altcoins. Now this logic has changed. Altcoins now receive as much attention as or even more than large-cap cryptocurrencies. The numerous subdivisions covered by altcoins provide investors with numerous opportunities to earn excess returns.
The market has been bullish recently, and capital interest in altcoins is highly concentrated in a few tracks and protocols. This article will analyze the driving factors behind the market prices of privacy coins and Meme coins, analyze the market's transformation from hyping Meme coins to pursuing revenue-generating protocols, and introduce how some protocols use revenue to carry out token repurchases and return value to currency holders.
privacy coin
The anonymous nature of the blockchain allows third parties to identify users' consumption patterns, counterparties and other information, which limits the sensitive trading activities that can be carried out on the chain. The Zcash network is one of the mainstream privacy protection solutions. Zcash forked from the Bitcoin code base in 2016, introducing private transaction and private address functions that can be turned on independently; so far this year, Zcash's return rate has reached 218%.
ZEC's futures positions and spot trading volume have increased significantly since November 2025, and futures open positions have continued to hit new highs. During this period, the funding rate has been negative many times.
Data source: Talos CM Market Data Pro
ZEC futures exploded in popularity in October 2025, and the size of open contracts before 2026 exceeded US$300 million; after a round of corrections when funding rates turned negative, the size of open positions continued to rise and now exceeds US$2 billion.
The proportion of ZEC shielded circulation continues to rise, and the proportion of shielded transactions and fully shielded transactions surged sharply in August 2026.
Data source: Talos CM Network Data Pro
Zcash has two core privacy tools: shielding fund pools and shielding transactions. The shielded fund pool has customized encryption security and privacy attributes; shielded transactions rely on zero-knowledge proof to hide transaction details such as transaction participants and transfer amounts.
In 2026, the stock of shielded ZEC hit a new high, with slightly more than 30% of ZEC stored in shielded privacy addresses; shielded transactions accounted for 52% of the total Zcash network transaction volume, reflecting users' acceptance of privacy technology. The encryption market will pick up in August 2026, and the usage of private transactions will explode simultaneously.
Meme Coin
Historically, Meme coins have been able to help public chains activate liquidity and attract capital. Meme currency issuance platforms exclusive to each ecosystem have risen rapidly, and users have flocked to Pump.fun on Solana and Pons on the Robinhood chain. PUMP tokens have increased by 134% during the year.
The returns of the 50 meme coins in 2026 will be polarized, with only a few skyrocketing and most recording negative returns.
Data source: Talos CM Prices
However, the internal performance of Meme coins is seriously divided, and only a few tokens have achieved positive returns. According to Mingsheng’s classified statistics, the median return rate of Meme coins is ‑27%.
Some popular Meme coins have explored a new market-making model: forming a trading pool with their own tokens and tokenized stocks. This method is popular on the Robinhood chain and manipulates the circulation of tokenized stocks to simultaneously increase the prices of Meme coins and tokenized stocks.
The figure shows the operational logic of using the meme currency trading pool to lock up tokenized stocks to create a circulation squeeze and stimulate buying demand in the real securities market.
For example: Developers build the "Meme/AMC Tokenized Stock (AMC)" Uniswap trading pool. Users buy AMC tokenized shares and exchange them for Meme in the pool. The more AMC there is in the pool, the less AMC is available for exchange, pushing up the price of Meme currency. Investors rush to buy Meme, which in turn consumes the limited AMC tokenized shares and drives up its price. In order to meet the market's demand for AMC, market makers need to buy real AMC stocks in the traditional securities market and mint tokenized versions to sell to traders. This set of buying pressure attempts to use the price of the tokenized target on the chain to drive the market price of AMC stocks in the real market.
revenue generating agreement
On the other side of the market, investors are also optimistic about protocols that have been commercialized, including Meme coin issuance platforms.
The Uniswap unified proposal allows the protocol to extract a portion of the handling fees from the trading volume of the v2 and v3 trading pools. After turning on the handling fee switch, Uniswap can fund various projects, ecological incentives, and promote the development of the protocol. In the Ethereum network in August 2026, the v3 pool contributed approximately 47% of Uniswap’s transaction volume.
The chart shows the changes in monthly transaction volume of each version of Ethereum Uniswap. V4 transaction volume has grown rapidly, V2 has continued to decline, and V3 has contributed the main transaction volume in the long term.
Data source: Talos CM Market Data Pro
Lending agreements also achieve stable cash flow. Aave sets a reserve factor in each lending market, and a portion of the interest paid by the borrower is transferred to the treasury. Stablecoin lending is widely popular due to its stable price and deep liquidity; within the Ethereum Aave platform, 5 stablecoins contribute 68% of the fee income. On an annualized basis, Aave’s Ethereum lending business is expected to generate revenue of US$47 million.
The estimated daily income of each reserve asset in Aave v3 continues to rise, with stablecoins such as USDC and USDT being the main sources of income.
Data source: Talos CM Network Data Pro
Token buyback and destruction
A very common practice nowadays: the agreement takes business revenue, repurchases tokens in the secondary market, performs destruction, and reduces the total circulation. More and more protocols are launching buyback programs to return value to currency holders.
The chart compares the Hyperliquid market-wide weekly trading volume with the HYPE price. The HYPE price is trending upward, and the platform's weekly trading volume has pulsed higher multiple times.
Data source: Talos CM Market Data Pro
Hyperliquid continues to use revenue to repurchase and destroy HYPE tokens. Revenue sources include:
Transaction fees: HyperCore market, HIP‑3 HyperEVM market, HIP‑4 results market generate transaction fees, part of which belongs to Hyperliquid;
HIP‑1 and HIP‑3 Auctions: Developers pledge HYPE to participate in the auction. Only those who succeed in the auction have the right to list the spot and perpetual contract markets on HyperEVM respectively; the HYPE pledged by the winning bidder is directly destroyed;
USDC is an AQAv2 aligned quoted asset: Hyperliquid platform USDC reserves generate U.S. debt and short-term debt returns, and Circle and Coinbase need to share approximately 90% of reserve returns to Hyperliquid;
HyperEVM network handling fee: Hyperliquid verification nodes participating in network security charge HyperEVM on-chain interaction handling fees.
Other revenue-generating protocols such as Uniswap and Aave also carry out token buyback and destruction. Uniswap on the Ethereum chain has destroyed more than $12 million worth of UNI tokens. Guidelines issued by the U.S. SEC indicate that token repurchases carried out by normally operating protocols may not necessarily be judged as securities.
The chart shows the number of UNIs destroyed through the fee switch. The daily destruction value has pulse peaks, and the cumulative destruction amount continues to grow.
Data source: Talos CM Network Data Pro
Outlook
This round of altcoin rebound is of higher quality and more concentrated market conditions than in the past. Meme coins still account for some of the gains, but the market has clearly shifted towards protocol tokens with core narratives and the ability to generate business income; the revenue earned by the protocol will be used for ecological reinvestment or token repurchase and destruction to feed back the development of the protocol.