TokenPost.ai
Crypto teams are increasingly reaching for token ‘buybacks’ as a go-to defense when prices slide—on the intuitive premise that reducing circulating supply should lift value. But a review of onchain data across multiple projects suggests the opposite: buybacks rarely create durable token value, and often simply burn runway that could have been used to build products or grow users.
The debate was crystallized by Bankr (BNKR) developer 0xDeployer, who pushed back on community demands for more repurchases. Even if the project “spent all revenue from the last six months on $BNKR buybacks,” he argued, “the chart would look the same two weeks later—except we’d be out of money to keep building.” It reads like a rhetorical flourish, but recent buyback programs from Jupiter (JUP), dYdX (DYDX), and Clanker (CLANKER), alongside widely cited counterexamples such as Hyperliquid (HYPE) and Aave (AAVE), paint a consistent picture: buybacks tend to be a ‘capital return’ mechanism, not a growth engine.
Why TradFi buybacks don’t map cleanly onto crypto
In traditional equity markets, buybacks are typically executed from surplus cash and framed as a tax-efficient way to return capital to shareholders. Quant studies, including research attributed to Two Sigma, have found that companies repurchasing shares often already show stronger profitability, leverage profiles, and cash-flow metrics before those buybacks occur. In other words, buybacks are frequently an outcome of business strength, not the cause of it.
Token markets invert that sequence. Many crypto buybacks are launched under social pressure, funded from budgets that would otherwise support development, liquidity incentives, or distribution. And unlike equities—whose dilution is usually bounded by board-approved issuance—tokens can face large and pre-committed emissions and unlock schedules that turn repurchases into a rounding error against supply expansion.
Case 1: Jupiter (JUP)—about $70 million spent, still down roughly 92% from peak
Jupiter (JUP), a leading Solana-based DEX aggregator, introduced a buyback program in February 2025, allocating 50% of fees to repurchasing JUP and locking purchased tokens for three years. Over roughly 12 months, the protocol deployed about $70 million.
By early 2026, however, JUP traded around $0.15—about 92% below its high. The core issue wasn’t a lack of buyback commitment; it was the scale of supply dynamics. Circulating supply had expanded meaningfully since launch, while unlocks of roughly tens of millions of tokens per month were scheduled to continue into mid-2026. Against the implied sell pressure, the buyback absorbed only a small fraction of unlock-driven supply—insufficient to reset market pricing.