Crypto projects have poured about $640 million (855.6 billion won) into buybacks of their own tokens this year. Moves to directly link protocol revenue and token value are spreading, but some point out that whether buybacks lead to real business growth is a separate issue.

Cointelegraph reported on Sept. 4 that token buybacks by crypto projects total about $638 million (852.9 billion won) this year, up about 17 percent from $545 million (728.6 billion won) in the same period last year. The total amount spent in 2024 was only $366,000 (489.3 million won).

A buyback is a method in which a project uses revenue to purchase its own tokens on the market. If the acquired tokens are burned, the circulating supply falls, creating an effect of reduced supply. If they are stored in the treasury, they can be used later for rewards or ecosystem expansion.

About 90 percent of this year’s buybacks were concentrated in Hyperliquid and Pump.fun. Hyperliquid is putting 99 percent of revenue into buying and burning HYPE, while Pump.fun is allocating half of revenue to PUMP buybacks and burns. The value of PUMP removed from circulation so far totals $446.65 million (597.2 billion won).

DeFi project Spark chose a different strategy. It bought more than 143 million SPK with protocol surplus but plans to store them in the treasury rather than burn them, to use them for rewards for long-term participants and other purposes.

The problem is that buybacks do not guarantee a price rise. Despite aggressive buybacks, PUMP remains about 50 percent below its all-time high from September last year. It is also a burden that funds used for buybacks reduce resources that could go to hiring developers, product development and business expansion.

In particular, token buybacks differ in legal nature from share buybacks. Unlike stocks, tokens generally do not guarantee corporate equity or rights to dividends or residual assets. The key issue for sustainability, some argue, is whether tangible value remains for investors to hold the token even if buybacks stop.