Grayscale’s latest valuation data shows Aave and Jupiter with positive earnings yields, yet holders of both tokens face negative yields once buybacks, rewards and supply growth are netted.
Key Takeaways
- ✓AAVE: 3.7% earnings yield, -1.0% holder yield
- ✓JUP: 3.5% earnings yield, -2.6% holder yield
- ✓Aave bought 205,000 AAVE in ten months
- ✓Litterbox Trust has burned about 134 million JUP
Grayscale head of research Zach Pandl set out both measures in an October 21 note on crypto valuations.
Earnings are positive, holder yields are not
Grayscale’s adjusted earnings yield divides a protocol’s earnings by its circulating market value, then subtracts the rate at which circulating supply grew. Its tokenholder yield counts only what reaches holders: staking rewards plus buybacks, minus new issuance, divided by circulating market value. Earnings here means fees left after paying lenders, liquidity providers and other suppliers.
Both measures subtract supply growth, so the gap between them approximates earnings that stayed with the protocol instead of reaching holders, as long as Grayscale’s issuance figure tracks circulating-supply growth. A negative tokenholder yield also means, by Grayscale’s formula, that new issuance outweighed buybacks and staking rewards combined.
Source: Grayscale, chart accompanying its October 21 note.
Aave’s buybacks refill a reserve that pays out AAVE
Aave began buying AAVE on the open market in April 2025. Its official documentation lists a $50 million annual budget, with weekly purchases of $250,000 to $1.75 million executed by the Aave Finance Committee. The DAO’s funding report says the program acquired more than 205,000 AAVE, about 1.28% of total supply, in its first 10 months.
Aave does not burn the tokens it buys. They go to the Aave DAO Ecosystem Reserve, which pays staking rewards, grants and service providers, so AAVE taken off the market can return to circulation. That may help explain how a sustained buyback program sits beside a negative tokenholder yield.
Operating costs draw on the same revenue. A March governance proposal sought to cut the buyback budget to $30 million. It cited borrow-fee revenue about 25% below its peak, January 2026 revenue of $7.95 million against $13.5 million a year earlier, and an optimistic 2026 operating budget of $190 million against 2025 revenue of $142 million. The proposal also made the case against bigger buybacks: spending on GHO stablecoin liquidity and growth could return more to holders than repurchases.
Jupiter spends half its onchain revenue on JUP
Jupiter’s transparency page says 50% of onchain revenue has gone to the Litterbox Trust since February 2025, which buys JUP through automated onchain purchases. The trust operates as a long-term reserve and has burned about 134 million JUP. The other half of onchain revenue and all offchain revenue fund the team’s operations, with any excess going to treasury reserves.
In Grayscale’s figures, those purchases and burns have not kept pace with new JUP entering circulation. The note names token unlocks alongside issuance as sources of dilution, which makes Jupiter’s unlock schedule the other half of the JUP picture.
Ordinary holders sit below the published figure. JUP holders receive no direct share of protocol fees, and Active Staking Rewards go quarterly to stakers based on time-weighted stake. Under Jupiter’s tokenomics rules, locked team tokens cannot earn them. Because Grayscale’s tokenholder yield includes staking rewards, anyone holding JUP or AAVE without staking earns less than it shows.
Burns remove tokens for good, minus new minting
A burn is the one destination that cannot pay tokens back out, though minting can still eat into it. PancakeSwap’s September burn report puts numbers on that offset.
2,963,567 CAKE burned
−
652,564 CAKE minted
=
2,311,003 CAKE net cut
Minting offset about 22% of the burn. The report excludes mints tied directly to burning and spreads weekly burns across reporting months. According to PancakeSwap’s tokenomics documentation, minted CAKE funds farms, the lottery and ecosystem growth.
Hyperliquid burns without a matching mint on this side. Its fee documentation says the Assistance Fund converts allocated trading fees into HYPE and burns them. Hyperliquid has since added reserve-income funding to its buyback model, which raises the money available for purchases without itself showing how much was bought.
Three disclosures that will test these numbers
| What to watch | Where it appears | Timing |
|---|---|---|
| Aave’s buyback budget and executed purchases | Aave governance forum, TokenLogic dashboard | As budget proposals are voted on |
| JUP unlocks against Litterbox buys and burns | Jupiter transparency page, Litterbox Trust wallet | Alongside each quarterly staking reward round |
| CAKE net supply change | PancakeSwap monthly burn report | The October report |
If Grayscale updates its chart, a narrower gap between the two yields would show more of AAVE’s and JUP’s earnings reaching holders, while a wider one would point to supply growth or retained spending absorbing more of them.
This article is provided for informational purposes only and does not constitute financial or investment advice. Research yield estimates are not guaranteed payouts or forecasts of token-price performance.
Be the first to comment