Crypto token buybacks surge to $640M in 2026, sparking debate on value creation

Author: Christina Comben (Contributing Writer, Cointelegraph Magazine, September 4, 2026)

Compiled by Deep潮 TechFlow

Shenchao Overview: Crypto projects are pouring hundreds of millions of dollars into buying back their own tokens. Since the beginning of 2026, buyback volumes have reached approximately $640 million, up about 17% year-over-year, with Hyperliquid and Pump.fun accounting for nearly 90% of the total.

On the surface, buybacks (and burns) create demand, reduce supply, and support the token price, giving holders a more tangible sense that "the protocol is making money." But on the other hand, every dollar spent on buying tokens cannot be used to hire developers, expand operations, or strengthen the balance sheet.

This article, drawing on perspectives from 1inch, Bitwise, and Spark, argues that buybacks can support token economics but do not necessarily improve the underlying business or rescue protocols that are fundamentally unsustainable. As tokens increasingly resemble stocks and regulators begin questioning “where does the value actually come from?”, the real issue may be this: if buybacks stop, do you still have a reason to hold this token?

Crypto projects are spending hundreds of millions of dollars to buy back their own tokens. But are buybacks creating lasting value—or just making tokens appear more valuable than they really are?

As the industry matures and crypto projects increasingly take cues from traditional finance (TradFi), they are beginning to emulate the practices of publicly traded companies. The latest trend sweeping through the crypto space is token buybacks: using revenue to repurchase the project’s own tokens.

Since 2026, crypto projects have spent approximately $640 million on this, representing a roughly 17% increase compared to the same period last year and more than an order of magnitude higher than the mere $366,000 spent in 2024. Hyperliquid and Pump.fun alone account for nearly 90% of current spending.

Where did this surge of enthusiasm suddenly come from?

Buybacks create demand for the token, while burns reduce supply, making each token more valuable. This dynamic applies upward pressure on the token price.

It also creates a more direct connection between token holders and the economic activity of the underlying protocol. Orest Gavryliak, Chief Legal Officer at the decentralized exchange aggregator 1inch, told Magazine:

When a project implements buybacks and burns backed by revenue, it typically has one or two goals in mind: either reducing the circulating supply of tokens or demonstrating to the market the logic behind the protocol’s revenue generation.

Gavryliak said that telling users “we bought back and burned tokens” is much more straightforward than explaining how governance rights work, how fees are set, or how the protocol is used.

You might wonder if it’s backward for a project to buy its own token—after all, projects typically sell tokens to raise funds and cover costs.

Almost, but there’s a key prerequisite. Using generated revenue to repurchase tokens (either re-holding or burning them) creates an implicit link between the protocol’s success and the token’s value—something that has long been a pain point for crypto projects. As Max Shannon, Senior Research Associate at Bitwise Europe, explains:

Buybacks and burns remain effective ways to create value for token holders: they generate consistent demand for the token in the open market, directly linking the token’s success to platform adoption.

For an industry that has spent the past few years obsessed with narratives or betting on the greater fool theory, this is nothing short of a seismic shift—those who bought Fartcoin or Peanut the Squirrel weren’t drawn by solid economic models.

Some protocols have taken this approach much more aggressively. For example, Hyperliquid allocates 99% of its revenue to repurchasing and burning HYPE; Pump.fun uses 50% of its revenue to repurchase and burn its native token, with $446.65 million worth of PUMP already removed from circulation.

Chart: HYPE Burns. Source: Hyperliquid

The DeFi infrastructure protocol Spark offers a slightly different model: according to its co-founder and CEO Sam MacPherson, it has accumulated purchases of over 143 million SPK tokens through public market buybacks funded by protocol surpluses.

However, these tokens were not destroyed; instead, they remain in Spark’s treasury to reward long-term participants in the ecosystem. MacPherson told Magazine that the focus is not simply on reducing supply:

Holders should participate in the long-term economic success of the protocol, rather than receiving dividends every time the protocol generates revenue.

He said that the buyback allows Spark to align incentives while "retaining flexibility over how and when the purchased SPK will ultimately be deployed," making the token economically meaningful rather than reducing it to "a simple dividend mechanism."

Token buybacks are also a highly tax-efficient way to return revenue to token holders, as users avoid hefty tax bills on dividends or rewards.

Although the above logic sounds utterly rational, the bigger question is: Is buying your own token truly the best use of project funds?

It may not hold true in all cases, said MacPherson:

The right question to ask is: What is the highest-value use for the next dollar of surplus?

He said that if a protocol can reinvest capital with attractive returns, it may be far more valuable than "distributing revenue as soon as it's earned."

Figure: PUMP Burns. Source: Pump.fun

Buybacks can support the token economy without necessarily improving the underlying business.

There is no guaranteed assurance that buybacks will lead to higher token prices. Pump.fun has been aggressively buying back and burning PUMP since July 2025, yet the token remains about 50% below its September 2025 all-time high. Similarly, the price gains UNI received after Uniswap’s UNIfication proposal in November 2025 have since been halved.

Shannon noted that "many factors" contributed to these price movements, so they do not prove that the buyback failed, but:

They prompt investors to debate whether these startup-style projects should reduce the portion of revenue allocated to buybacks and burns, and instead reinvest more back into the team and the project itself.

Investors should carefully distinguish between "buyback schemes designed to boost token prices" and "successful business models."

A protocol that generates real profits and is sustainable might reasonably determine that spending some funds on buying tokens is the optimal choice; however, a struggling project may simply be trying to manipulate its price through buybacks. MacPherson bluntly states:

Buybacks cannot make an unsustainable protocol sustainable.

Although token buybacks may appear similar to stock buyback programs, this does not mean that tokens are becoming more like stocks.

Chart: UNI has dropped approximately 50% since the start of buybacks and burns. Source: Coingecko

Shareholders own a portion of a company and may have rights to vote, receive dividends, or claim residual assets. Holders of tokens, however, typically do not possess these same legal rights; Orest believes this distinction is crucial. “It’s a market mechanism, not a legally enforceable right,” he says.

MacPherson describes SPK as a "pseudo-equity" within an on-chain protocol. Although there is no legal ownership structure in the traditional corporate sense, economically, Spark is "trying to create many of the same characteristics: participation in governance, long-term alignment, and a mechanism that rewards those most committed to the protocol with its success."

But as crypto begins to emulate repurchase agreements in TradFi, dark clouds may be gathering on the horizon, as regulators ponder what these mechanisms truly mean.

Although the 2025 Digital Asset Market Clarity (CLARITY) Act is still a draft and should not be considered established law, Gavryliak said its proposed framework highlights a key question: Where does the value of tokens actually come from?

If value stems from the network’s own functionality, the asset resembles a commodity; but if value is built upon the project team’s efforts in delivery, marketing, or providing returns to token holders, then it is already a security. Ultimately, don’t dress a token in the clothes of a stock and expect it to still be a commodity.

Ultimately, crypto investors want to know what underlies the token—revenue, users, a sustainable economic model, and a credible way for the token to benefit from these factors.

Although buybacks may offer a solution, they could also just be another form of financial engineering that makes the token appear more valuable than it truly is, without addressing the underlying issues, as Gavryliak noted:

If buybacks stop, is there still a reason to hold this token? If the answer is no, then the issue goes deeper than tokenomics.