Crypto projects are spending hundreds of millions of dollars buying back their own tokens. The harder question is whether those programs create lasting value or simply make tokens look more valuable than they are.
So far in 2026, crypto projects have spent about $640 million on token buybacks, up roughly 17% from the same period last year. That is far above the $366,000 recorded in 2024. Hyperliquid and Pump.fun alone account for nearly 90% of current spending.
Why buybacks have become a major crypto theme
As the industry matures, more projects are borrowing a familiar playbook from traditional finance and using revenue to repurchase their own tokens.
Buybacks can create demand in the open market, while burns reduce circulating supply. Together, those mechanics can add upward pressure to a token’s price. They also give holders a more direct connection to the economics of the underlying protocol.
Orest Gavryliak, chief legal officer at decentralized exchange aggregator 1inch, told Magazine: "When projects implement revenue-backed buybacks and burns, they usually have one or two goals in mind: either to reduce the circulating token supply or to show the market the logic of investing in protocol revenue."
He said telling users that a project has bought back and burned tokens is far more straightforward than explaining how governance works, how fees are set or how the protocol is used.
Why projects buy their own tokens
At first glance, the idea can look circular. Projects often sell tokens to raise money, so buying them back later may seem to defeat the point. The distinction here is that repurchases are funded by revenue the protocol has already generated.
When a protocol uses surplus to buy back tokens and either hold or burn them, it creates an implicit link between protocol success and token value. Max Shannon, senior research associate at Bitwise Europe, said: "Buybacks and burns remain an effective mechanism for accruing value to tokenholders: they create persistent bid-side demand for the token in public markets and directly tie the success of the token to platform adoption."
The article contrasts that with an industry that spent the past few years chasing narratives or leaning on a greater-fool trade. Buyers of Fartcoin or Peanut the Squirrel, it notes, were not there for solid economic design.
Some protocols are far more aggressive than others. Hyperliquid allocates 99% of revenue to buying back and burning HYPE. Pump.fun directs 50% of revenue to repurchases and burns of its own token, and PUMP worth $446.65 million has already been removed from circulation.
Spark keeps repurchased tokens in its treasury
DeFi infrastructure protocol Spark has taken a different route. Co-founder and CEO Sam MacPherson said Spark has bought more than 143 million SPK through open-market repurchases funded by protocol surplus.
Those tokens have not been burned. Instead, they remain in Spark’s treasury and are intended to reward long-term ecosystem participants. MacPherson told Magazine that the point is not simply to shrink supply.
"Tokenholders should participate in the long-term economic success of the protocol, not receive a payout every time the protocol generates revenue," he said.
In his view, buybacks let Spark build that alignment while preserving flexibility over how and when the repurchased SPK will ultimately be deployed. That, he said, gives the token economic meaning instead of turning it into "a simple dividend mechanism."
The article also says token buybacks can be a highly tax-efficient way to return revenue to holders because users do not have to take on a heavy tax bill tied to dividends or direct rewards.
Repurchases may not be the best use of capital
Even if the logic is easy to follow, that does not mean buybacks are always the best option. MacPherson framed the issue this way: "The question should be: what is the highest-value use of the next dollar of surplus?"
If a protocol can reinvest capital at an attractive return, he said, that may create more value than distributing revenue as soon as it arrives.
The article argues that buybacks can support tokenomics without improving the core business. They also come with no guarantee of a higher token price.
Pump.fun has been buying back and burning PUMP at scale since July 2025, yet the token still trades about 50% below its September 2025 all-time high. UNI also gave back about half of the gains it saw after Uniswap introduced its UNIfication proposal in November 2025.
Shannon said many factors can drive those price moves, so they do not prove buybacks have failed. Still, they have pushed investors to ask whether startup-like projects should commit a smaller share of revenue to buybacks and burns and put more back into their teams and products.
The piece draws a line between a buyback program that lifts a token price and a business model that actually works. A protocol generating real, sustainable surplus may reasonably decide that buying its token is a good use of part of that capital. A struggling project, though, may simply be trying to use buybacks to move price.
MacPherson put it plainly: "Buybacks will not make an unsustainable protocol sustainable."
Tokens are not the same as shares
Buybacks may resemble share repurchase programs on the surface, but that does not mean tokens are turning into equities.
Shareholders own part of a company and may have voting rights, dividend rights or claims on residual assets. Tokenholders typically do not carry the same legal rights. Gavryliak said that distinction matters: "This is a market mechanism, not a legally enforceable entitlement."
MacPherson described SPK as a form of "pseudo-equity" for an onchain protocol. The legal ownership structure of a traditional company is not there, he said, but Spark is trying to create many of the same economic characteristics: governance participation, long-term alignment and a way for the protocol’s most committed participants to benefit from its success.
Regulators are also asking where value comes from
As crypto adopts more buyback-style mechanisms from traditional finance, regulatory questions are moving closer into view.
Gavryliak pointed to the 2025 Digital Asset Market Clarity, or CLARITY, Act. He said the bill remains a draft and should not be treated as settled law, but the framework raises a central issue: where does a token’s value come from?
"If value comes from the functionality of the network itself, then the asset looks like a commodity; but if value is built on the efforts of the project team in delivery, marketing, or providing returns to tokenholders, then it is already a security. At the end of the day, don’t dress a token up as a stock and expect it to remain a commodity."
The article ends with a broader test for investors. What ultimately sits underneath a token: revenue, users, a sustainable economic model, and some credible way for the token to benefit from those things.
Buybacks may offer one answer. They may also be another form of financial engineering that makes a token appear more valuable without fixing deeper weaknesses. As Gavryliak said: "If the buybacks stopped, would there still be a reason to hold the token? If the answer is no, then the problem runs deeper than tokenomics."