BlockBeats news: On January 4, Jupiter co-founder SIONG posted on X discussing whether to stop JUP buybacks. He mentioned that over $70 million was spent on JUP buybacks last year, but the price did not change significantly. Instead, this $70 million could be used to provide growth incentives for both existing and new users.
Regarding the discussion on "whether to stop JUP buybacks," Solana co-founder Anatoly Yakovenko suggested that it would be best to store profits in the form of "protocol assets that can be claimed in the future." Users could lock and stake their tokens for one year to earn token rewards. As the balance sheet grows, stakers would receive greater returns.
Multicoin co-founder Kyle Samani agrees with the core idea of Anatoly Yakovenko, but believes the mechanism needs further optimization. Traditional stocks have no effective way to reward long-term holders. Crypto teams should find ways to allocate a disproportionate share of value to long-term holders.
Jordi Alexander, founder of Selini Capital, said, "Adjusting the buyback amount based on price is a good approach. When the price is low, more buybacks should be made as much as possible, because this can significantly reduce the supply. When the market is overheated, the pace should be slowed down. Some founders are more accustomed to traditional stock buyback decisions made by the CEO/management team, who can conduct buybacks at their discretion. However, if transparency, predictability, or legal issues are the primary concerns, a more decentralized protocol can achieve this in a programmatic way. A simple method is to use a calculated price-to-earnings ratio (P/E), and each protocol can design its own P/E-based buyback mechanism according to its specific situation."
KOL fabiano.sol in the Solana ecosystem stated, "The reason buying back JUP isn't working is that people currently have no reason to hold JUP. I believe the correct approach should be to first give people a reason to hold the token, and then proceed with buybacks after that need is fulfilled. Buybacks and burning remain one of the best deflationary mechanisms, but they require time. Currently, 50 million JUP (approximately $10 million) is distributed quarterly as staking rewards, and Jupiter uses 50% of its revenue to buy back JUP and deposit it into Litterbox, repurchasing $10–20 million worth of JUP each quarter. A potential alternative would be to use this $10 million for staking rewards instead of buying back JUP. At the current price, this could generate around 25% APY, which is highly attractive. Although this isn't a direct deflationary mechanism, I believe it would be more beneficial for the token's price than simple buybacks."