The year 2025 marked the "Industrial Revolution" of fiscal discipline in the cryptocurrency market. During this year, on-chain protocols demonstrated unprecedented cash flow generation capabilities and, through total buyback expenditures exceeding $1.4 billion, attempted to reshape the underlying logic of tokenomics. This figure showed exponential growth compared to previous years, driven not only by the maturation of DeFi protocol business models but also by a structural shift in the U.S. regulatory environment—particularly the advancement of the Digital Asset Market Clarity Act and the GENIUS Act, which provided a compliant path for the supply management of "digital commodities".
However, capital investment did not lead to equal value capture. This article dissects the extreme polarization in the 2025 buyback market: on one hand, Hyperliquid achieved multiple-fold token price growth with a buyback scale exceeding $640 million (nearly 46% of the total market), establishing "net deflation" as the core anchor for asset pricing; on the other hand, despite investing tens of millions of dollars, Jupiter and Helium were ultimately unable to counter structural inflation on a quantitative scale, leading to discussions in early 2026 about halting buyback plans and shifting towards growth incentives. Furthermore, the case of Pump.fun reveals how aggressive buybacks can become exit liquidity in the absence of long-term lock-up mechanisms.
This article uses the "Net Flow Efficiency Ratio" (NFER) as a key metric to evaluate buyback effectiveness. Data indicates that buybacks only effectively transmit to secondary market prices when the buyback capital velocity significantly exceeds the token unlock and inflation velocity (NFER > 1.0). Conversely, when NFER < 1.0, buyback funds merely act as a "buffer" and may even accelerate selling by whales.
As Helium and Jupiter shift towards user subsidies, we observe Web3 protocols undergoing a division similar to "value stocks vs. growth stocks" in traditional equity markets: mature protocols capture value through buybacks and dividend-like attributes, while growth-stage protocols need to build network effect moats through capital expenditure.
1. Summary of 2025 Buybacks for Top Crypto Protocols
In 2025, buybacks primarily followed two models:
- Fee Conversion Model: Examples include Hyperliquid and Aave. Directly use a portion of protocol revenue to purchase tokens. This model is highly transparent and usually proportional to protocol usage.
- Treasury/Revenue Burn Model: Examples include Helium and Pump.fun. The project uses earned revenue to buy back and burn tokens, or lock them up. This is seen more as a deflationary mechanism.
Notably, Hyperliquid, with over $640 million in buybacks, captured nearly half the market, becoming the annual "Buyback King". DeFi blue-chips like MakerDAO (Sky) and Aave remained稳健 (steady), consistently outputting tens of millions in buybacks. The Solana ecosystem was very active, with projects like Jupiter, Raydium, and Pump.fun contributing significant buyback volume, albeit with substantial controversy.
The actual efficacy of buyback strategies showed extreme polarization. On one hand, projects like Hyperliquid (HYPE) and Aave (AAVE) achieved relative price stability through buybacks, following Bitcoin in wide fluctuations rather than plummeting; on the other hand, projects like Jupiter (JUP) and Helium (HNT), despite massive investments ($70 million and millions in monthly revenue respectively), encountered sharp price drops or market indifference.
Analyzing the projects below shows that单纯的 (mere) buybacks, if unable to quantitatively overwhelm structural selling pressure or lacking strong binding to protocol growth, will become "exit liquidity" for early investors or teams. Of course, this might also be the purpose for some projects initiating buybacks.
| Project Name | Annual Buyback (Est.) | Annual Release/Unlock (Est.) | NFER | Price Performance | Conclusion |
|---|---|---|---|---|---|
| Hyperliquid (HYPE) | ~$1.20B | ~$350M | 3.42 | Surge (4x) | Strong Net Deflation. Buyback power far exceeds sell pressure, price highly elastic. |
| Aave (AAVE) | ~$50M | ~$0 (Near full circulation) | >10 | Steady Rise | Net Deflation. Mature asset, buybacks directly increase scarcity. |
| MakerDAO (Sky) | ~$96M | Low (Low inflation) | High | Volatile | Theoretically Net Deflation, but interfered with by non-market factors like rebranding. |
| Pump.fun (PUMP) | ~$138M | N/A (Full circ. but high turnover) | Low | Plunge (-80%) | Structural Failure. Lack of lock-up, buybacks consumed by speculative selling. |
| Jupiter (JUP) | ~$70M | ~$1.20B | 0.06 | Plunge (-89%) | Severe Net Inflation. Buybacks only 6% of sell pressure, a drop in the bucket. |
| Raydium (RAY) | ~$100M | High (Liquidity mining) | <0.5 | Poor Performance | Net Inflation. Emission rate faster than buyback rate. |
Under the Net Flow Efficiency Ratio (NFER) metric, we see巨大差异 (huge differences) in buyback project performance and some objective规律 (rules). First, the NFER calculation is as follows.
$\text{NFER} = \frac{\text{Annualized Buyback Volume}}{\text{Annualized Inflation Valuation (Unlocks + Emissions)}}$
From the table data:
- NFER > 1.0 is a necessary condition for price increase. Only when buyback funds are sufficient to cover all structural selling (miners, team, early investors) will the price rise pushed by marginal buying.
- NFER < 0.1 means buybacks are purely wasteful. In this case, stopping buybacks and转向 (turning to) fundamental building is a rational financial decision.
In 2025, there is no simple linear positive correlation between the size of the buyback amount and token price performance.
1.1 Stable Performers Group: Mechanism and Growth Resonance
Hyperliquid (HYPE) • Buyback Scale: ~$644.6M.
• Mechanism: Assist Fund mechanism, using ~97% of exchange fees for buybacks.
• Performance: Price performed extremely strongly in 2025, even driving a re-rating of the entire Perp DEX sector.
• Success Reason: Extremely high buyback ratio (almost all revenue used) combined with explosive product growth (market share capture from CEXs), forming a "positive flywheel".
Aave (AAVE) • Buyback Scale: Annualized ~$50M ($1M weekly).
• Mechanism: Using "Fee Switch" to deploy protocol excess reserves to buy AAVE.
• Performance: Price rose steadily, showing significant抗跌性 (resistance to decline) in H2 2025.
Bitget Token (BGB) • Buyback Scale: Quarterly burns, Q1 2025 burn ~1.58M BNB equivalent value (referencing BNB model) BGB buyback burn . Bitget burned 30M BGB (~$138M) in Q2 2025.
• Mechanism: Strongly tied to CEX business, and BGB is empowered as the Gas token for Layer 2 (Morph).
• Performance: Price reached a new All-Time High (ATH) of $11.62 .
• Success Reason: Besides scarcity from buybacks, more importantly, utility expansion. BGB upgraded from a simple exchange points system to a public chain Gas token.
1.2 Controversial Group: Futile Struggle Against the Trend
Pump.fun (PUMP) • Buyback Scale: ~$138.2M .
• Mechanism: 100% of daily revenue used for buyback and burn.
• Performance: Price down 80% from ATH .
• Failure Reason: Classic case of "feeding whales with buybacks". Due to highly concentrated token distribution, buyback funds became a liquidity exit for large holders. Additionally, meme sector热点转移极快 (hotspots shift extremely fast), making infrastructure tokens难以捕获持续价值 (difficult to capture sustained value).
Sky (formerly MakerDAO) (SKY) • Buyback Scale: ~$96M .
• Mechanism: Smart Burn Engine.
• Performance: Neutral to weak, did not meet expectations.
• Failure Reason: Chaos from rebranding. The migration process from MKR to SKY (1:24,000 split) and the "freeze function" of the USDS stablecoin raised concerns . Despite the huge buyback amount, governance-level uncertainty suppressed buying confidence.
Raydium (RAY) • Buyback Scale: ~$100.4M .
• Mechanism: Part of trading fees used for buyback and burn.
• Performance: Highly volatile, failed to form a long-term uptrend.
• Reason: As an AMM DEX, Raydium faces极其严重的 (extremely severe) liquidity mining emissions. To attract liquidity, the protocol must constantly issue more RAY. The buyback buying power appears inadequate against the massive inflationary selling pressure.
2. Classification and Evolution of Value Capture Mechanisms
In the 2025 practice, we observed that "buyback" is not a single model but has evolved into various complex variants. Each model's mechanism of action in tokenomics and market feedback is截然不同 (completely different). Next, we delve deeper into buyback mechanisms to探讨 (explore) what scale projects suit which buyback mechanism, or whether they are suitable for initiating buybacks at all.
2.1 Fee Conversion and Accumulation Mode
Representative Cases: Hyperliquid, Aave
The core of this model is to directly convert real revenue generated by the protocol into the native token and remove it from circulation through burning or locking.
- Hyperliquid's "Black Hole Effect": Hyperliquid designed an on-chain fund called the Assistance Fund, which automatically receives ~97% of the trading fees generated.
- Mechanism Details: This fund continuously buys HYPE tokens on the secondary market. By the end of 2025, the fund had accumulated nearly 30M HYPE, worth over $1.5B.
- Market Psychology: This model creates a visible, continuously growing buy order. Market participants not only see the current buying but also anticipate the increasing buying pressure as trading volume grows. This expectation pushed HYPE into the heights of value discovery.
- Aave's "Treasury Optimization": The Aave DAO, through governance proposals, uses ~$50M annual protocol revenue to回购 (buy back) AAVE.
- Strategic Difference: Aave is not in a hurry to burn these tokens but treats them as "productive capital". The回购的 (repurchased) AAVE is used to supplement the ecosystem's safety module or as future incentive reserves. This approach, while not immediately reducing the total supply, significantly reduces the circulating supply and enhances the protocol's risk resistance.
2.2 Aggressive Burn Mode
Representative Cases: Pump.fun, MakerDAO (Sky), Raydium
This is the most traditional deflation model, aiming to increase the value per token by permanently reducing supply.
- Pump.fun's "Zero-Sum Game": As a Memecoin launch platform, Pump.fun used all its revenue (once reaching millions daily) to buy back and burn PUMP tokens.
- Limitation: Despite burning $138M worth of tokens, the PUMP price plunged 80% . The reason lies in PUMP's lack of lock-up mechanisms and long-term utility; the buyback funds became an ideal exit channel for speculators. This proves that单纯的通缩 (mere deflation) cannot counter selling pressure without a "reason to hold".
- Sky (MakerDAO): Uses the "Smart Burn Engine", utilizing stablecoin income generated from over-collateralization to buy and burn SKY. Although the mechanism is稳健 (sound), the benefits from burning were overshadowed by governance-level uncertainty during the chaotic rebranding period.
2.3 Trust Lock-up Mode
Representative Case: Jupiter
Jupiter attempted a middle path to balance deflation and reserves: buying back tokens but not burning them immediately, instead locking them in a long-term trust called "Litterbox".
- Mechanism Design: Jupiter承诺 (committed) to use 50% of fees to buy back JUP and lock it for 3 years.
- Market Feedback: Failed. The market perceived the "3-year lock-up" as "delayed inflation" rather than "permanent deflation". Facing huge unlock pressure, even if tokens are temporarily out of circulation, the market tends to price in future selling pressure upfront.
3. Net Flow Theory: The Mathematical Essence of Buyback Success/Failure
By comparing Hyperliquid, Aave with Jupiter, and Pump.fun, we can distill three core variables that decide buyback success: Net Deflation Rate, Market Game Psychology, and Project Lifecycle Stage.
3.1 Variable One: Net Deflation Rate (Buyback Volume vs. Emission Volume) Whether buybacks can push prices higher depends not on the absolute amount bought back but on the "net flow". $\text{Net Flow} = \text{Buyback Burn Volume} - (\text{Team Unlock} + \text{Investor Unlock} + \text{Staking Emissions})$
Hyperliquid was the only top protocol to achieve "net deflation" in 2025.
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Buyback Side: Annualized buyback amount as high as $1.2B (extrapolated from Q3/Q4 data).
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Release Side: For most of 2025, HYPE was in a low circulation, low release phase. Although it faced an unlock of ~9.92M tokens (~3.66% of supply) for core contributors in November, this selling pressure was completely覆盖 (covered) by its massive buyback volume.
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Calculation Result:
$\text{Net Flow} \approx \$100M/\text{month (buying)} - \$35M/\text{month (unlock pressure)} = +\$65M/\text{month (net buying)}$
3.2 Sailing Against the Wind: Jupiter's Inflation Trap
Jupiter demonstrates the powerlessness of buybacks when faced with massive inflation.
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Buyback Side: Annual expenditure ~ $70M.
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Release Side: JUP faces an extremely steep unlock curve. In early 2026, JUP faced unlock pressure of ~$1.2B, with an additional linear unlock of ~53M tokens (~$11M) monthly.
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Arithmetic Result:
$\text{Net Flow} \approx \$6M/\text{month (buying)} - \$10M+/\text{month (unlock pressure)} = -\$4M/\text{month (net selling pressure)}$
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Market Game: Under such巨大的负净流量 (huge negative net flow), the $70M in buyback funds effectively became "exit liquidity" for early investors and the team unlocking tokens. Market participants realized this and thus chose to sell during buybacks, not hold. Solana co-founder Anatoly pointed this out: protocols should accumulate cash and conduct a large-scale one-time buyback in the future, forcing current unlockers to trade at a "future expected price," rather than directly送钱 (giving money) to the unlockers as is happening now .
4. Major Strategic Shift: From "Price Support" to "Infrastructure"
In early 2026, as Jupiter and Helium相继宣布 (successively announced) stopping or reevaluating their buyback plans, the industry underwent deep reflection. This trend indicates that Web3 projects are returning to the logic of "business operation" (investing in growth) from simple "financial engineering" (pumping prices via buybacks).
4.1 Helium (HNT): User Acquisition Cost Better Than Buybacks
On January 3rd, Helium founder Amir Haleem announced the cessation of HNT buybacks,理由简单直接 (the reason simple and direct): "The market doesn't care if the project buys back" .
- Data Background: Helium Mobile business reached monthly revenue of $3.4M. Previously, part of this money was used to buy back HNT, but the token price remained weak.
- New Strategy: Redirect these funds towards subsidizing hardware, acquiring new users, and expanding network coverage.
- Logic Restructuring: For DePIN projects, network effects (number of nodes, user scale) are their core moat. By subsidizing to lower user门槛 (thresholds), it can bring more active users who will continuously consume data credits in the future, generating endogenous, rigid token burn demand. This "organic burn" is far more valuable than the project's artificial "buyback burn".
- Return on Investment (ROI) Analysis: $1M in buybacks might only stabilize the price for a few days; but $1M used for subsidies could bring 10,000 long-term paying users, whose Lifetime Value (LTV) will contribute far more than $1M.
4.2 Jupiter (JUP): Growth Incentives vs. Capital Return
Jupiter co-founder Siong Ong also initiated a community discussion about stopping buybacks, proposing to redirect the $70M funds towards "growth incentives" .
- Core Argument: Buybacks are an inefficient allocation of capital when the token is still in a high-inflation phase. Funds should be used to build moats, such as developing new features (like JupUSD), incentivizing developers, or subsidizing user trading slippage.
- Strategic Significance of JupUSD: Jupiter launched the JupUSD stable币 (stablecoin) backed by the BlackRock BUIDL fund. If buyback funds were used to incentivize JupUSD liquidity and adoption, it could build a deeper moat for the Jupiter ecosystem, which would do far more to提升 (enhance) JUP token value in the long run than short-term price support.
4.3 Optimism (OP): Counter-Trend Buyback
Interestingly, while Jupiter and Helium retreated, Optimism proposed a plan in January 2026 to use 50% of its Superchain revenue to buy back OP tokens.
- Why Counter-Trend? This reflects differences in project lifecycle. Optimism has passed the early stage of生态通过通胀补贴增长 (ecosystem growth subsidized by inflation); now its Superchain generates considerable real revenue (Sequencer Fees).
- Strategic Intent: Optimism attempts to shed the label of "useless governance token" by establishing a hard link between "revenue-token" through buybacks. This indicates that buybacks are not wrong at all stages. When a protocol has a solid moat and cash flow, and the token valuation needs to shift from "dream multiple" to "earnings multiple," buybacks are a reasonable means.
5. Conclusion and Outlook: The New Paradigm for 2026
Financial engineering cannot solve structural inflation; revenue itself is not a moat, net flow is.
5.1 Conclusion
- Buybacks are not a panacea: For projects in a high-inflation phase (with大量代币未解锁 - many tokens unlocked), buybacks are not only ineffective but actually掠夺 (plunder) the protocol treasury. They transfer precious cash flow to early profiteers who are exiting.
- Stage determines strategy:
- Growth Stage: Funds should be used for user acquisition and network expansion. Buybacks at this stage will be seen as "management lacking investment imagination".
- Mature Stage: With strong cash flow and controllable inflation, should use buybacks or dividends to reward holders and establish a value anchor.
New Track Brought by Regulation: The passage of the CLARITY Act and GENIUS Act allows "digital commodity"类代币 (type tokens) to manage supply more compliantly. In the future, we will see more cases like Aave, managing treasury and token supply精细地 (finely) within the legal framework.
5.2 Investor Advice
When evaluating crypto projects in 2026, do not buy simply because they "announce a buyback". Must perform the following checks:
- Calculate NFER: Is the buyback amount greater than the unlock value for the next year?
- Review Holder Structure: Is it dominated by long-term believers or "mercenaries"?
- Understand Fund Source: Do buyback funds come from real protocol revenue, or are they just consuming raised capital?
In 2026, the market will no longer reward单纯的 (mere) "burn" narratives but will reward those protocols that can use cash flow to build real moats and ultimately achieve net deflation.
