In an interview on October 10th when a shift occursHayes reflected on the lessons of past market cycles and explained why this one may be different.
He said that unlike previous booms caused by speculation and hype, today’s decentralized projects are starting to prove their true value by generating revenue and rewarding token holders.
Lessons from past altcoin seasons
Hayes cited the early altcoin cycle as an example of what went wrong. During the 2021 “DeFi Summer” period, dozens of decentralized apps (DeFi) launched tokens to attract users, promising big yields and a new financial system. However, most of these projects failed to build sustainable businesses. “They had no real customers, no product market fit, no cash flow,” Hayes said. Even the few companies that were successful in attracting users did not necessarily share profits or value with token holders.
This pattern was repeated in 2023 and 2024, but with a twist. Venture capital firms heavily promoted projects using high value locks (TVLs) and limited token supply to drive up prices. However, users became more cautious after learning that a high TVL does not necessarily mean strong fundamentals. According to DefiLlama, blockchain-wide TVL increased to around $90 billion in early 2025, but much of that capital was rotated between protocols that offered short-term incentives rather than long-term utility.
Hayes said this change in user behavior is healthy. As crypto investors become more rational, projects are being forced to prove that they can operate like real businesses: make money, build loyal users, and share profits.
The rise of sustainable DeFi
In Hayes’ view, the next altcoin season will be shaped by projects that create substantial 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 talks about the prerequisites for altcoin season
BitMEX co-founder Arthur Hayes spoke about the past altcoin season in an October 10 interview with When Shift Happens. He pointed out that decentralized apps (DeFi) need to generate cash flow through disintermediation and reward tokens. 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 receive a share of the profits. It’s a sign of industry maturation. Investors are starting to focus more on fundamentals like revenue, user retention, and governance than empty promises and token inflation.
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