Ethereum Strong Rebound, Analyzing the Potential Pumping Power of Leading Ecological Projects

Recently, the price of Ethereum has significantly risen, with a 48% increase over the past month, driving the prices of many projects within its ecosystem upward. Historical data shows that during bull market cycles, high-quality projects in the Ethereum ecosystem typically exhibit a multiplier effect. As one of the important projects in the Ethereum ecosystem that has garnered much attention, a leading decentralized exchange has risen by 28% in the past month, and if the market continues, there may be further room for increase.

In addition to benefiting from the overall trend of Ethereum, the project also has several potential positive factors: the regulatory environment may become more lenient, the project's business data remains leading, and the structural pump in the token price.

1. Changes in the Regulatory Environment

From September 2021 to August 2023, the project underwent a period of regulatory uncertainty, including facing investigations and legal lawsuits from regulatory agencies. At the end of August 2023, the project won a collective lawsuit, with the court ruling that its agreements were primarily used for legitimate purposes.

From April 2023 to May 2024, regulatory pressure increased. Regulatory agencies issued warning notices to the projects, accusing them of potentially violating relevant securities laws. The project team subsequently submitted a detailed response document, rebutting these accusations.

Starting from early 2025, the regulatory attitude began to change. In February, the regulatory agency announced the termination of the investigation into the project. In April, the project team was invited to participate in a cryptocurrency regulatory roundtable. In May, the U.S. Congress began discussing a new regulatory framework for crypto assets aimed at providing clearer legal definitions for digital asset trading.

Currently, with the new government coming to power and the gradual formation of a new regulatory framework, the regulatory risks faced by the project have significantly decreased. In the future, a more favorable regulatory environment may be welcomed, which will be extremely beneficial for the project's development.

2. Project Business Overview

1. Outstanding business data

This project is one of the earliest and largest decentralized trading protocols in the crypto market. The total locked value is (TVL), reaching 5.12 billion USD, with a trading volume of 84.5 billion USD in the past 30 days, ranking second among similar projects. The annual revenue is approximately 929 million USD, and if calculated using traditional valuation methods, its price-to-earnings ratio is far lower than that of centralized exchanges and tech giants in the same industry.

According to the project foundation's Q1 2025 financial report, as of the end of March, the foundation held approximately $150 million worth of tokens and cryptocurrency assets, with a good financial condition, and funding is expected to last until early 2027.

2. Exploration of Token Economic Models

The project has been working hard to find more use cases and value for its tokens. The "fee switch" mechanism has been proposed multiple times in the past, but it has not been implemented due to regulatory concerns. With the improvement of the regulatory environment, this mechanism is expected to advance in the second half of 2025.

In addition, the project launched its own Layer 2 network in February 2025, providing new application scenarios for the token. This network uses the project's token as the validator's staking token, allowing validators to earn a share of on-chain revenue.

3. Token Market Performance

The current circulating market cap of the project token is approximately $4.2 billion, with a fully diluted market cap of $6.7 billion. All tokens are in circulation, with about 37% staked.

In the contract market, the open interest reached 448 million, with the ratio of open interest to market capitalization at approximately 10.6%. The long-short position comparison is balanced, but large holders tend to lean towards long positions. Since the rise of Ethereum, trading in the futures market for this token has also become increasingly active.

In the spot market, the price trend of the token shows a certain correlation with Ethereum. During the rise in November last year, the token's volatility was about 2-3 times that of Ethereum. However, in the recent rise in April, the increase in Ethereum actually exceeded that of the token, which may indicate that the token still has room for further increase.

4. Conclusion

With the new government coming to power, the regulatory direction of the cryptocurrency industry has become a key issue. As the largest decentralized trading protocol currently, the regulatory handling of this project may become a benchmark for the entire industry. The project team is also actively participating in the formulation process of regulatory rules.

Considering the excellent business data and robust financial status of the project itself, as well as the new value brought to the token through the new layer two network and the potential "fee switch" mechanism, combined with the overall pump trend of the Ethereum ecosystem, the project token may welcome structural bullish opportunities. For investors optimistic about the future market, this is a quality project in the Ethereum ecosystem worth paying attention to.