Are token buybacks becoming the new altcoin tokenomics?

[kaankaya]

Looks like crypto projects found a new favorite way to support their tokens: just buy them back.

So far in 2026, projects have spent around $638M on token buybacks, which is already a record. And the funny part is that almost 90% of this came from only two projects - Hyperliquid and Pump.fun. Hyperliquid is responsible for roughly $370M,and Pump.fun spent close to $200M.

I kinda understand why people like this model.

If a protocol is actually making money from fees, using part of that revenue to buy its own token sounds much better than another token where holders just wait and hope the price goes up. Hyperliquid takes this pretty far - around 99% of eligible fee are used for HYPE buybacks through its Assistance Fund.

And now Ethena wants to go in a similar direction. The Foundation proposed a fee switch where, after USDe reaches a certain supply milestone, 95% of net revenue paid to the Foundation could go toward ENA buybacks, with only 5% left for growth.

That makes me wonder if we are slowly getting a different type of altcoin market.

For years we heard the same stuff: utility, ecosystem, governance, future adoption. A lot of it sounded good on paper, but there was often very little connection between the success of the actual business and the token itself.

Buybacks at least try to connect those two things.Protocol earns more → more money can go into buying the token.

Simple idea.

But I’m not fully sold on it either. A buyback can reduce selling pressure and create constant demand, sure, but it doesn’t magically make a bad token good. If revenue falls, users leave, or token emissions are still huge, buying some tokens from the market may not change much. The Financial Times also pointed out that buyback programs haven't automatically translated into better token performance across the market.

So maybe the real thing to watch is where does the money for those buybacks actually come from? If it comes from real fees and a business that people are genuinely using, then yeah, I think that gets interesting.

What do you guys think? Would you rather hold an altcoin with aggressive buybacks, direct fee sharing, or would you prefer the project to put that money back into growth?

[hugeblack]

Token buyback programs are a more subtle form of token burning, both aimed at either increasing demand or decreasing supply to achieve the same goal: driving up the price. there is no difference between them, and projects that operate this way prioritize their own profits over those who buy the tokens.

[EarnOnVictor]

What do you guys think? Would you rather hold an altcoin with aggressive buybacks, direct fee sharing, or would you prefer the project to put that money back into growth?

This isn’t really new, as it's being adapted from the traditional financial system, where companies buy back their own shares for various reasons. Personally, I’d choose direct fee sharing over buybacks or growth spending, assuming the protocol is already successful, popular, and generating real revenue.

Getting paid out in stablecoins or ETH means I’m locking in actual profits without having to sell my core token position. That’s much more attractive to me than relying on buybacks to indirectly support the token price.

[$crypto$]

So maybe the real thing to watch is where does the money for those buybacks actually come from? If it comes from real fees and a business that people are genuinely using, then yeah, I think that gets interesting.

Revenue, usually from trading fees, launchpad or others. Hyperliquid spends about 99% of revenue on token buyback, Pump.fun about 50% for buyback.

So the token repurchase is not entirely strategic, only some with high volume are able to grow well, while the rest still remain no change at all.

Several articles describing the buyback.

https://incrypted.com/en/crypto-companies-spent-a-record-640-million-buying-back-their-own-tokens/
https://unitypad.org/learn/token-buybacks-explained/

[kaankaya]

So maybe the real thing to watch is where does the money for those buybacks actually come from? If it comes from real fees and a business that people are genuinely using, then yeah, I think that gets interesting.

Revenue, usually from trading fees, launchpad or others. Hyperliquid spends about 99% of revenue on token buyback, Pump.fun about 50% for buyback.

So the token repurchase is not entirely strategic, only some with high volume are able to grow well, while the rest still remain no change at all.

Several articles describing the buyback.

https://incrypted.com/en/crypto-companies-spent-a-record-640-million-buying-back-their-own-tokens/
https://unitypad.org/learn/token-buybacks-explained/

Yeah, that’s exactly the part I’m a bit skeptical about too. The biggest thing here is how much real revenue the project actually generates and how much of that can consistently go back into the token.

Hyperliquid is probably the best example of where the model actually has some weight because the fees are there.

Thanks for the links btw
Saving these, will have a proper read this evening

[TastyChillySauce00]

What do you guys think? Would you rather hold an altcoin with aggressive buybacks, direct fee sharing, or would you prefer the project to put that money back into growth?

Buyback should be the way to go, token holders have lesser right compared to stock holder, even if token holder is allowed to vote for governance, they don't really vote for the foundation behind the governance therefore making it significantly less beneficial to hold token than a stock, buyback is the last thing these protocol could do to share the benefit with their holders. Otherwise, what would really be the point of deploying token in the first place if the token isn't really supported by the project through buyback from revenue, if the project is sutainable and want to provide value to your holders, it should be number one priority

[Jostle]

Token buybacks are good if and only if the tokens are subsequently burnt out of circulation. A diminishing supply would gradually and slowly raise prices if (BIG IF) the underlying fundamentals of the crypto projects are strong. Burning is the extra fuel to boost prices. Otherwise, if the underlying fundamentals are bad, even token buyback-and-burnt can't save it from a spiral of death.

The problem with token buybacks, I think, is if the buybacks are then use to return to circulation, so it's just "tokenism" (pun intended).

[ultrloa]

What do you guys think? Would you rather hold an altcoin with aggressive buybacks, direct fee sharing, or would you prefer the project to put that money back into growth?

This isn’t really new, as it's being adapted from the traditional financial system, where companies buy back their own shares for various reasons. Personally, I’d choose direct fee sharing over buybacks or growth spending, assuming the protocol is already successful, popular, and generating real revenue.

But usually what's happening in real scene is, those buy backs or even those token burnings activities made by devs is just part of their marketing.

I also tried to look for information about those projects sustained to do this kind of activity, maybe you will find this data released by CoinGecko interesting https://www.coingecko.com/research/publications/token-buybacks

But well even if they are promising, still I  will be more careful dealing with those alts knowing that they are still risky option to invest.

[MAAManda]

What do you guys think? Would you rather hold an altcoin with aggressive buybacks, direct fee sharing, or would you prefer the project to put that money back into growth?

Aggressive buyback offers are typically associated with meme token projects & they're by no means favorable for those of us looking to invest. IDK, I have no idea what Hyperliquid (HYPE) & Pump.fun (PUMP) are thinking. They already have a great business model, perhaps the buyback mechanism within their ecosystem gives new investors the confidence to buy the token.

Personally, I’m not a fan of projects that use buyback mechanisms, I’d prefer to see a project continue to develop using the profits it generates.

[kaankaya]

What do you guys think? Would you rather hold an altcoin with aggressive buybacks, direct fee sharing, or would you prefer the project to put that money back into growth?

Aggressive buyback offers are typically associated with meme token projects & they're by no means favorable for those of us looking to invest. IDK, I have no idea what Hyperliquid (HYPE) & Pump.fun (PUMP) are thinking. They already have a great business model, perhaps the buyback mechanism within their ecosystem gives new investors the confidence to buy the token.

Personally, I’m not a fan of projects that use buyback mechanisms, I’d prefer to see a project continue to develop using the profits it generates.

I get that. Buybacks can make sense when the project already has strong revenue, but I also think the percentage matters a lot.



If too much profit keeps going into the token, you start wondering how much is left for product, liquidity, new markets and actual growth. Hyperliquid can probably afford to be aggressive because the business is already generating serious fees, but I’d still watch whether this stays sustainable over time.



Guess the best model is probably somewhere in the middle.

[MAAManda]

I get that. Buybacks can make sense when the project already has strong revenue, but I also think the percentage matters a lot.

In conclusion, a buyback is a sound mechanism, but it must be underpinned by strong project utility, adoption & revenue. Buyback without those three elements is nonsense, much like the meme token projects we see offering similar things, they lack strong adoption, utility & revenue. Ultimately rendering the buyback worthless & ineffective. Can we agree on this?

[coin-investor]

In conclusion, a buyback is a sound mechanism, but it must be underpinned by strong project utility, adoption & revenue. Buyback without those three elements is nonsense, much like the meme token projects we see offering similar things, they lack strong adoption, utility & revenue. Ultimately rendering the buyback worthless & ineffective. Can we agree on this?

It still boils down to the use case and what the coin brings to the ecosystem. I agree that it's useless if it's a meme coin that's doing a buyback, its a publicity stunt to make their investors feel that they are here for the long term and they are investing in their coin to continue its existence.

Buybacks look great for projects with good potential, and they are backed by well-known developers or companies, and they have a strong community that supports their use case.

[Findingnemo]

On a side note, I am seeing those two names mentioned in the OP very often so have a question like those two are associated with any exchange? Because all I see is an attempt to pump the price to create a demand and at some point they will dump it harder that is the sole purpose of a project that is purely driven on price factor alone, it need to have a use case to think about holding.

[jossiel]

I get that. Buybacks can make sense when the project already has strong revenue, but I also think the percentage matters a lot.



If too much profit keeps going into the token, you start wondering how much is left for product, liquidity, new markets and actual growth. Hyperliquid can probably afford to be aggressive because the business is already generating serious fees, but I’d still watch whether this stays sustainable over time.



Guess the best model is probably somewhere in the middle.

For as long as they can see that it is sustainable, they're going to do that. It's not only about the tokenomics there but they've built the trust of their community, and that's why they are doing it still.

So if this aggressive buy back program they do is effective, there's no need for them to stop it as of now.

Sometime later, they might stop it but as long as they see that this model works for the project and still drives them some revenue, no reason to stop it.

[o48o]

Token buyback programs are a more subtle form of token burning, both aimed at either increasing demand or decreasing supply to achieve the same goal: driving up the price. there is no difference between them, and projects that operate this way prioritize their own profits over those who buy the tokens.

No difference? Buyback relies on centralized entity buying them back, assuming that there's some sort of income for them to buy it back with. Also while that usually includes burning at least some of them, it doesn't even need to have that.

Meanwhile for example ETH is automatically burning a portion of transaction fees, by sending some of the fee to burn (or "unretrievable") address. Just burning them don't create similar demand either, as it doesn't involve market buying them before burning.

[cryptoaddictchie]

What do you guys think? Would you rather hold an altcoin with aggressive buybacks, direct fee sharing, or would you prefer the project to put that money back into growth?

As long as they buying at rate which the retailers also buy or at least has some details on their plan of buyback like what Binance did that do a regular at certain time.

Buybacks are also good especially if they are removing it on the total supply ^{(Burning the bought out)} cause if they buying it then keeping the tokens for potential selling later then it will not move any users to trust them. They should buyback and burn it for credibility and this will increase the trust and reputation.

[The Cryptovator]

Buying back own token by team is nothing new; a lot of projects seem to promise a buyback after launch. But only solid projects' buyback works well. Shit projects buyback is just a promise; even buyback has no effect on the projects. But some big projects' buyback announcements push the projects.

It’s better if the team buys back and burns. Remember, just buyback plans on the tokenomics don't mean the project is worth investing in. We have to be careful when we intend to invest in a new project. Most are just scammers nowadays, and finding a legit project is quite complicated.

[internetional]

On a side note, I am seeing those two names mentioned in the OP very often so have a question like those two are associated with any exchange?

HYPE is a token that was originally tied to the Hyperliquid exchange. From the very beginning, the exchange had its own purpose-built blockchain, and HYPE tokens were used there as stake required to earn the right to add blocks to that chain. In practice, though, this function was largely nominal, because you could not become a validator without permission from the exchange team.

Later, the team opened up validator status to those able to lock up the largest amounts of HYPE: the holders of several dozen of the biggest stakes become validators. On top of that, a separate blockchain called HyperEVM was developed alongside the exchange, where HYPE is used to pay gas fees.

So today it would no longer be accurate to say that HYPE is associated only with the exchange. The exchange chain still depends on it for block production, which means that without HYPE, blocks would stop being produced and all exchange operations would come to a halt. But the token now has other functions as well.

As for the PUMP token, I am not sure it can really be described as being associated with any particular exchange. On one hand, there is PumpSwap, an exchange developed by the same team that created PUMP. On the other hand, as far as I know, PUMP has never really been positioned as the token of that exchange.

[Findingnemo]

On a side note, I am seeing those two names mentioned in the OP very often so have a question like those two are associated with any exchange?

HYPE is a token that was originally tied to the Hyperliquid exchange. From the very beginning, the exchange had its own purpose-built blockchain, and HYPE tokens were used there as stake required to earn the right to add blocks to that chain. In practice, though, this function was largely nominal, because you could not become a validator without permission from the exchange team.

Later, the team opened up validator status to those able to lock up the largest amounts of HYPE: the holders of several dozen of the biggest stakes become validators. On top of that, a separate blockchain called HyperEVM was developed alongside the exchange, where HYPE is used to pay gas fees.

So today it would no longer be accurate to say that HYPE is associated only with the exchange. The exchange chain still depends on it for block production, which means that without HYPE, blocks would stop being produced and all exchange operations would come to a halt. But the token now has other functions as well.

As for the PUMP token, I am not sure it can really be described as being associated with any particular exchange. On one hand, there is PumpSwap, an exchange developed by the same team that created PUMP. On the other hand, as far as I know, PUMP has never really been positioned as the token of that exchange.

I am getting the vibes of Binance Coin, not entirely the same but kind of a similar story, it started as a token for exchange on the ETH network and then became independent now it has even exceeded the growth of Ethereum in terms of adoption rate. So yeah this might have potential too but still some users are kind of shilling for the tokens.

[Josefjix]

Binance BNB had been doing buyback programs, don't know if they have stopped, burning some part of the token I mean. Each time the period reach, BNB price rises upward for a short period of time.

Some projects who have real good intentions often become successful when this program is implemented especially when they keep to their words and experiments it consecutively.

Some promises it and never get to execute that plan, they often fail and never buy back causing the token to loose liquidity and price dump.