Lessons from Past Altcoin Seasons
Hayes pointed to earlier altcoin cycles as examples of what went wrong. During 2021’s “DeFi Summer,” dozens of decentralized apps (DeFi) launched tokens to attract users, promising big yields and new financial systems. But most of these projects failed to build sustainable businesses. “They had no real clients, no product-market fit, and no cash flow,” Hayes said. Even the few that succeeded in attracting users didn’t always share profits or value with their token holders.
The pattern repeated in 2023 and 2024, but with a twist. Venture capital firms heavily promoted projects using high total value locked (TVL) and limited token supply to boost prices. However, users became more cautious as they learned that high TVL didn’t always mean strong fundamentals. According to DefiLlama, overall TVL across blockchains grew to about $90 billion in early 2025, but much of that capital rotated between protocols offering short-term incentives rather than long-term utility.
Hayes said this shift in user behavior is healthy. As crypto investors become more rational, projects are being forced to prove they can operate like real businesses—earning revenue, building loyal users, and sharing profits.
The Rise of Sustainable DeFi
In Hayes’s view, the next altcoin season will be shaped by projects that generate real economic value. He highlighted platforms like Hyperliquid, a decentralized derivatives exchange, as examples of the new wave. Hyperliquid not only attracts active traders but also shares trading revenue with token holders, aligning incentives between builders and users.
Arthur Hayes on the Prerequisites for Altcoin Season
Arthur Hayes, co-founder of BitMEX, discussed past altcoin seasons in an October 10th interview with When Shift Happens. He noted decentralized apps (DeFi) should generate cash flow via disintermediation and reward token… pic.twitter.com/hsC4leGIiQ
— Wu Blockchain (@WuBlockchain) November 6, 2025
This trend suggests that decentralized apps are moving closer to traditional business models, where users pay for services and token holders earn a share of profits. It’s a sign of maturity for the industry. Investors are beginning to favor fundamentals—such as revenue, user retention, and governance—over empty promises and token inflation.