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Token Buybacks Are Booming. But Do They Really Make Crypto Tokens Go Up?

Token Buybacks Are Booming. But Do They Really Make Crypto Tokens Go Up?

CoineditionCoinedition2026/08/14 06:00

Crypto protocols spent more than $1.4 billion buying back their own tokens in 2025. Hyperliquid alone made up about 46% of that total, using roughly 97% of its trading fees to buy HYPE.

Other major protocols, including Aave, Uniswap, Sky, Pump.fun, Aptos, and Solana, are trying similar strategies: use protocol revenue to support the value of their tokens.

The idea is that if a protocol makes money and uses that money to buy or burn its own token, the supply falls and demand could rise.

But does this strategy actually work?

Recently, analyst Bill Hsu studied 10 major tokens with active buyback programs. Only three AAVE, HYPE, and SKY performed better than Bitcoin during the buyback period.

That means 7 out of 10 still underperformed Bitcoin.

So, announcing a buyback does not automatically mean a token will do better. Investors also need to look at how much money the protocol is actually making, rather than focusing only on the buyback news.

The buybacks that worked best were not just big announcements. They were large compared with the token’s supply and the protocol’s revenue.

Hyperliquid has spent about $644 million buying back HYPE using ongoing trading fees. Pump.fun has burned about 36% of its token supply and uses half of its revenue for more burns. 

Uniswap has burned more than 107 million UNI and started its fee system. Aave also uses protocol revenue for regular buybacks.

A small buyback may have little effect on price, even if the dollar amount sounds large. The key is to compare the buyback with the token’s total supply and market value. 

For example, a $20 million buyback that removes 13% of a token’s supply, as GMX has done, could have a bigger impact than a $150 million buyback that removes only 5% of a larger token’s supply.

Notably, Hyperliquid’s buyback system is different because it happens continuously and is directly linked to trading activity.

When trading volume goes up, HYPE buybacks go up too. The process does not depend on a vote, a treasury decision, or a foundation choosing to act.

This makes the system more predictable than other buyback programs, which can slow down or stop when funds run low.

HYPE’s strong performance suggests that consistent buybacks may matter more than simply announcing a large buyback.

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Disclaimer: The content of this article solely reflects the author's opinion and does not represent the platform in any capacity. This article is not intended to serve as a reference for making investment decisions.

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