The decentralized finance (DeFi) sector experienced a significant price surge in early November, as market sentiment suggests the recent US presidential election may foster a more favourable regulatory environment for DeFi projects.
UNI, AAVE, LDO, ENA, and MKR were among the biggest gainers, with Uniswap’s UNI leading with a 35% increase. This rally reflects investor expectations for value accrual mechanisms and utility in DeFi tokens, shifting away from purely governance-based uses.
Many DeFi tokens, including Uniswap, Aave, and Maker, saw substantial gains, with UNI achieving a local high of $9.58. The data from CoinGecko showed that all of these tokens increased in value by more than 20% in 24 hours, which analysts characterize as ‘regulatory optimism’ after Donald Trump’s victory. Charlie Sherry, head of finance at BTC Markets, highlighted that these DeFi tokens are increasingly seen as valuable assets due to potential value accrual through protocol fees.
For instance, Aave has proposed a “fee switch” mechanism, where a portion of fees collected by the platform could be distributed to token holders, creating tangible value beyond governance rights.
Likewise, Uniswap’s upcoming Layer 2 solution, Unichain, intends to share transaction fees with UNI holders, further enhancing UNI’s utility and appeal. These anticipated changes could shift DeFi tokens from being perceived as mere governance assets to investments with built-in value-generation features.
The recent US presidential election has fueled speculation regarding potential shifts within the SEC, which could impact the regulatory landscape for DeFi projects. According to 10x Research, SEC Chair Gary Gensler may resign in the coming months, potentially leading to a less stringent approach toward crypto regulation.
Sherry noted that DeFi protocols have been cautious about implementing value-accrual mechanisms due to the risk of enforcement actions from the SEC, as seen in the ongoing investigation into Uniswap Labs.
Market analysts suggest that Trump’s administration may introduce policies that bolster the investment appeal of DeFi tokens by promoting innovation and easing regulatory restrictions. This outlook has encouraged traders and investors to support DeFi tokens, anticipating a regulatory environment that could allow for the safe adoption of value accrual features without facing significant regulatory pushback.
Alongside regulatory hopes, DeFi tokens have benefited from broader market sentiment favouring underperforming assets. Markus Thielen, head of research at 10x Research, suggested that some traders adopted a “buy the laggard” strategy, aiming to invest in DeFi tokens that have performed poorly over the past year. According to Thielen, this approach could yield strong returns in 2025, particularly if BlackRock and other major asset managers push for increased exposure to Ether through exchange-traded funds.