As the industry matures and borrows more pages out of TradiFi’s playbook, crypto projects are starting to adopt some of the behaviors of public companies.
The latest craze rocking cryptoville is token buybacks: using revenue to buy back your own token.
So far in 2026, crypto projects have spent about $640 million on the practice, up around 17% from the same period the year prior, and an order of magnitude more than the $366,000 spent in 2024. Hyperliquid and Pump.fun accounting for almost 90% of the current spend.
So what’s the sudden appeal?
Buybacks can create demand for a token, while burns can reduce the supply making each token more valuable. That dynamic can cause upward pressure on the token price.
It also gives holders a more tangible connection to the economic activity on the underlying protocol. Orest Gavryliak, chief legal officer at decentralized exchange aggregator 1inch, tells Magazine:
“When projects implement revenue-funded buybacks and burns, they typically have one of two objectives in mind: either to decrease the token supply in circulation or to demonstrate the rationale for investing in protocol revenues.”
Gavryliak says that telling users a project has “bought and burned tokens” is “much more straightforward” than explaining how governance rights work, how fees are set, or how the protocol is used.
Related: Pump.fun laid off workers before they received millions in PUMP tokens: Report
But there’s a flipside: every dollar a protocol spends buying its token is a dollar it could have spent hiring developers, expanding the business, strengthening its balance sheet or building the product.
So, as buybacks become one of crypto’s hottest tokenomics tools, are they actually good for the projects using them?
Why crypto projects are buying themselves
You might wonder if projects buying their own token is counterproductive. After all, projects typically sell tokens to raise funds to cover costs.
Almost, but with an important caveat. Using revenue generated to buy back tokens (and then to hold them or burn them) creates an implicit connection between the success of the protocol and the value of its token. That’s something crypto projects have long struggled with. As Max Shannon, senior research associate at Bitwise Europe, explains:
“Buybacks and burns remain an effective way to accrue value to tokenholders: they create a continuous bid in the open market for the token, directly tethering token success to the platform’s adoption.”
That marks a sea-change for an industry that has spent the past couple of years chasing narratives or speculating on the greater fool theory — users who bought Fartcoin or Peanut the Squirrel didn’t do so for their sound economic models.
Some protocols are taking the idea much further than others. Hyperliquid, for example, has used 99% of its revenue to buy back and burn HYPE and 50% of Pump.fun’s revenue goes toward buying and burning its token, with $446.65 million worth of PUMP already removed from circulation.
HYPE Burns. Source: Hyperliquid
DeFi infrastructure protocol Spark offers a slightly different model, acquiring over 143 million SPK through open-market buybacks funded by protocol surplus, according to co-founder and chief executive Sam MacPherson.
But those tokens were not burned, and instead remain in the Spark treasury to reward long-term participants in the ecosystem. MacPherson tells Magazine the point is not simply to reduce supply:
“Tokenholders should participate in the long-term economic success of the protocol, rather than simply receive a distribution every time it generates revenue.”
He says buybacks allow Spark to create that alignment while “retaining flexibility over how and when the acquired SPK is ultimately deployed,” allowing the protocol to make its token economically relevant rather than “a simple dividend mechanism.”
Token buybacks are also a highly tax effective way to return revenue to holders, because users don’t cop a hefty tax bill on dividends or rewards.
Is buying the token really the best use of the money?
While that all sounds perfectly rational, the bigger question is whether buying your own token is really the best use of a project’s funds?
Probably not in every case. MacPherson says:
“The question should be: what is the highest-value use of the next dollar of surplus?”
If a protocol can reinvest capital at attractive returns, he says, that can be “far more valuable” than simply distributing revenue as it arrives.
PUMP Burns. Source: Pump.fun
Buybacks can support token economics without actually improving the underlying business.
There is also no ironclad guarantee that buybacks will translate into higher token prices. Pump.fun has been aggressively buying and burning PUMP since July 2025, but the token is still hovering 50% below its September 2025 all-time high. UNI has also given back around half of the gains it made after Uniswap unveiled its UNIfication proposal in November 2025….
cointelegraph.com