The Funding: Why token buybacks are suddenly back in focus
Crypto token buybacks are under scrutiny as many fail to support prices due to insufficient scale against selling pressure and poor execution.Summary
Token buybacks are regaining focus in crypto, but experts question their effectiveness as many protocols spent over $1.4 billion in 2025 with little price impact, exemplified by Helium pausing its program and Jupiter rethinking its strategy. Experts attribute this failure primarily to buyback amounts being too small relative to market selling pressure, especially from vesting unlocks and token emissions. Poor timing, such as buying when prices are already high, and a lack of lasting supply reduction also contribute to buybacks feeling 'cosmetic.'
For buybacks to work, protocols must already have solid footing, including real usage, stable revenue, and deep treasury capital to support buybacks alongside continued investment in growth. Effective programs must be frequent, rules-based, and clearly funded by recurring revenue, reinforcing genuine demand. Conversely, buybacks should be avoided if a project has a thin runway or weak fundamentals, as the capital might be better deployed into high-return growth opportunities. Some experts suggest dividends as a cleaner alternative for value accrual, provided regulatory clarity improves. Looking ahead, buybacks are expected to continue but require greater discipline, linking them to durable revenue and potentially incorporating hybrid models.
(Source：The Block)