Token Buybacks Are Booming. Are They Good For Crypto Projects?
Ecosystem
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Written by Christina Comben, staff writer, Reviewed by Andrew Fenton, staff editor
Token buybacks are booming. But are they good for crypto projects?
Magazine
Published: Sep 4, 2026
Crypto projects are allocating hundreds of millions to buy their own tokens. But are these token buybacks creating lasting value or merely inflating token prices?
As the crypto industry matures, adopting practices from Traditional Finance (TradiFi) becomes more common. One such trend is token buybacks—using revenue to repurchase your own token.
In 2026, crypto projects have spent approximately $640 million on token buybacks, a 17% increase from the prior year, and a significant jump from the $366,000 spent in 2024. Hyperliquid and Pump.fun account for nearly 90% of this year’s expenditure.
Why are projects buying back their tokens?
Token buybacks and burns can:
- Increase token demand.
- Reduce token supply, potentially boosting token value.
- Provide holders with a direct connection to the protocol’s economic activity.
Orest Gavryliak, Chief Legal Officer at 1inch, explains:
"When projects implement revenue-funded buybacks and burns, they typically aim to either decrease token circulation or demonstrate the rationale for investing in protocol revenues."
Gavryliak notes that buybacks are simpler to communicate than complex governance structures or fee settings.
The flip side
Every dollar spent on buybacks could have been allocated to development, business expansion, or strengthening the project’s balance sheet.
As token buybacks become a popular tool, are they truly beneficial for crypto projects?
Why crypto projects are buying themselves
It might seem counterintuitive for projects to buy their own tokens using revenue generated from selling tokens. However, this creates an implicit link between protocol success and token value, a shift from the past couple of years when crypto projects focused on narratives or the greater fool theory.
Some protocols are more aggressive than others. Hyperliquid, for instance, has used 99% of its revenue to buy back and burn HYPE, while Pump.fun allocates 50% of its revenue to similar activities.
DeFi infrastructure protocol Spark offers a different approach, acquiring over 143 million SPK through open-market buybacks.