Is the project buyback dividend really coming to an end?

Author: Chloe, ChainCatcher

In the world of traditional finance, stock buybacks are often seen as a "shot in the arm" for market confidence. When a company announces a buyback, it usually indicates that management believes the stock price is undervalued or that the company has ample cash flow. However, applying a similar strategy to Web3 projects has not yielded positive results.

Recently, Jupiter co-founder SIONG initiated a discussion on X, proposing to halt the buyback plan for the $JUP token. He stated that Jupiter has invested over $70 million in token buybacks over the past year, but the token price has performed poorly; meanwhile, Helium founder Amir Haleem directly announced the cessation of token buybacks, describing it as "throwing money into a black hole."

Why does tens of millions of dollars in real cash fail to make a splash in the crypto market? Is the issue rooted in the underlying design of the buyback strategy? Below is an overview of the buyback data performance from last year, along with market perspectives on project buybacks.

Data Performance: The Collective Waterloo of Buyback Projects in 2025

According to market research firm blockmates, which tracked buyback projects from January to October 2025, the top five projects were Hyperliquid, Pump.fun, LayerZero, Raydium, and Sky. Hyperliquid's buyback amount reached $716 million, while Sky, at the bottom of the list, invested $83 million.

However, the investment does not correlate with returns; aside from Hyperliquid, which maintained a strong price in the first three quarters (currently dropping from $45.5 at the end of October to $25.94 before publication), the other projects have continued to decline. This phenomenon has raised market doubts: if buybacks cannot enhance token value, is this money essentially wasted?

Perspective Debate: The Trade-off Between Buybacks, Staking, and Growth Incentives

Regarding whether projects should stop buybacks, the market voices are sharply divided:

Jupiter and Helium founders lean towards halting token buybacks and redirecting the funds to "acquire users," possibly through subsidizing transaction fees, rewarding new users, or enhancing product features to strengthen the fundamentals. However, this shift still faces challenges: tokens will continue to unlock, and users may choose to sell due to a lack of long-term confidence, creating ongoing selling pressure and risking further significant declines in token prices.

DeFi OG CM states that the core significance of buybacks lies in reducing circulating supply and establishing a "regular deflation" model. Ultimately, token prices depend on market supply and demand and project fundamentals, rather than the buyback actions themselves. Buybacks are undoubtedly beneficial for token holders but do not guarantee short-term "price increases." Project teams should not easily stop execution due to low token prices or buyback costs.

Helius CEO Mert Mumtaz argues that buybacks are essentially a pessimistic mechanism, with the implicit signal being that project teams cannot find better uses for funds than short-term price boosts, attempting to initiate a growth cycle through price reflexivity rather than product growth. Buybacks are not the best strategy in a competitive market; the only effective edge case is opportunistic buybacks during market crashes (when equity is irrationally undervalued), combined with aggressive reinvestment during normal periods. This is a judgment from the founder's perspective rather than the investor's.

Ajit Tripathi, former head of institutional business at Aave and fintech partner at ConsenSys, states that the buyback narrative is the most value-destructive play after meme coins. This logic was initially promoted by Solana's marketing to claim superiority over Ethereum, but it ultimately harmed all tokens, even those with revenue, forcing everyone to engage in purely financial games.

Additionally, many viewpoints propose alternative solutions. For instance, Jordi Alexander, founder of Selini Capital, observes that many projects fail not due to mechanisms but due to the "timing of execution" of token buybacks. Some star projects in this cycle (like HYPE, ENA, $JUP) executed large-scale buybacks during the most frenzied market periods when token valuations were the most unreasonable. When the price-to-earnings ratio of tokens rises to inflated numbers due to excessive speculation, project teams continue to execute buybacks, essentially buying from sellers at the highest point, which is a poor decision. Therefore, Jordi suggests that project teams need more complex "financial engineering," with an ideal model based on dynamic buybacks tied to the price-to-earnings ratio.

Solana founder Anatoly believes that projects should not pursue short-term price stimulation (buybacks) but should learn from traditional finance to establish a capital accumulation process lasting ten years. He favors staking mechanisms that allow long-term holders to gain more shares, thereby diluting short-term speculators. He believes profits should be stored as "future token entitlements" rather than consumed in market fluctuations.

Representing the views of Jordi Alexander, founder of Selini Capital, he argues that buybacks themselves are not wrong; the mistake lies in the "amateur execution." Projects should hire professional financial advisors to adjust buyback strategies based on token price-to-earnings ratios and market cycles, rather than blindly buying back, leading to the depletion of treasury at market peaks and leaving no funds available for market support during downturns.

Evolution from "Blind Buybacks" to "Strategic Value Management"

Token buybacks are essentially a "deflationary tool," not a guarantee of price increases. Amid various market fluctuations, buybacks often play a role of "passive defense," capable of reducing supply and establishing price support but unable to single-handedly reverse complex trends formed by macro conditions, unlocking pressures, or market sentiment.

The growth path of token value should evolve from a singular buyback action to strategic value management. First, projects need to establish execution strategies with better financial judgment, such as adhering to the logic of "buy low, reserve high": executing buybacks firmly when token prices are far below intrinsic value to maximize capital returns; and halting buybacks when market enthusiasm is too high and valuations are unreasonable, storing profits in the treasury as reserve funds or supporting product growth.

Furthermore, buybacks can only address the "supply" issue and cannot create "demand." A project must provide users with continuous reasons to hold tokens. These reasons may stem from expected distributions of protocol earnings, governance power in the ecosystem, or the product's irreplaceable competitiveness. Without solid fundamental support, any form of buyback ultimately becomes a channel for arbitrageurs to exit.