What Are Token Buybacks in Crypto?
Token buybacks are becoming popular in the crypto market in 2025. They are similar to stock buybacks on Wall Street but work differently. Many top altcoins use buybacks to manage their token supply. They either hold the tokens as reserves or burn them to reduce supply. This helps control the token’s value and market dynamics.
How Token Buybacks Affect Crypto Prices
Token buybacks and burns reduce the available supply of a cryptocurrency. This can increase the token’s price by creating scarcity. The net supply change depends on emissions, token unlocks, buybacks, and burns. If buybacks or burns do not offset new token releases, the supply may still grow, causing inflation.
Buybacks can stabilize prices temporarily. But long-term price growth needs steady buying pressure. Small or inconsistent buybacks may not have a lasting impact. Traders should compare buyback size to the total token supply to understand its effect.
Examples of Token Buybacks and Burns in 2025
- Aave: Started a weekly buyback program in April, buying $1 million worth of AAVE tokens. By October, it held nearly 99,000 tokens worth $27 million.
- Chainlink: Since August, Chainlink repurchased 463,190 LINK tokens, creating a $10.5 million reserve. This reserve grows with Chainlink’s revenue and helps reduce supply.
- Hyperliquid: Uses 97% of trading fees to buy back HYPE tokens. Its Assistance Fund holds over 32 million tokens worth $1.44 billion.
- Pump.fun: A Solana launchpad that uses most of its revenue for buybacks. It holds over 8% of its circulating supply, valued at $135 million.
- OKB: Burned 65.25 million tokens in August, cutting total supply to 21 million. This caused a 125% price jump on the same day.
- Shiba Inu: Regularly burns tokens through community and fee-based methods. Over 410 trillion SHIB tokens have been burned out of a max supply of 1 quadrillion.
Expert Opinions on Token Buybacks
Oliver Yates, CEO of Aplo: “Token buybacks can be either a planned part of tokenomics or a defensive move during market drops. Sustainable buybacks link to project revenue and are in the original design. Sudden buybacks may signal market manipulation. Governance models affect whether token holders decide to burn or hold repurchased tokens.”
Punit Agarwal, Founder of KoinX: “The crypto market is maturing with real business fundamentals like revenues and buybacks. ETFs and corporate reserves add structure. Burning tokens is transparent and builds trust, but holding tokens can also work if projects reinvest or reward users. Transparency is key.”
