Token buybacks are booming. But are they good for crypto projects?

Crypto projects are spending hundreds of millions buying their own tokens. But are buybacks creating lasting value — or just making tokens look more valuable than they really are?

As the industry matures and borrows more pages out of TradiFi’s playbook, crypto projects are starting to adopt some of the behaviors of public companies.

The latest craze rocking cryptoville is token buybacks: using revenue to buy back your own token.

So far in 2026, crypto projects have spent about $640 million on the practice, up around 17% from the same period the year prior, and an order of magnitude more than the $366,000 spent in 2024. Hyperliquid and Pump.fun accounting for almost 90% of the current spend.

Buybacks can create demand for a token, while burns can reduce the supply making each token more valuable. That dynamic can cause upward pressure on the token price.

It also gives holders a more tangible connection to the economic activity on the underlying protocol. Orest Gavryliak, chief legal officer at decentralized exchange aggregator 1inch, tells Magazine:

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

Related: Pump.fun laid off workers before they received millions in PUMP tokens: Report

But there’s a flipside: every dollar a protocol spends buying its token is a dollar it could have spent hiring developers, expanding the business, strengthening its balance sheet or building the product.

So, as buybacks become one of crypto’s hottest tokenomics tools, are they actually good for the projects using them?

You might wonder if projects buying their own token is counterproductive. After all, projects typically sell tokens to raise funds to cover costs.

Almost, but with an important caveat. Using revenue generated to buy back tokens (and then to hold them or burn them) creates an implicit connection between the success of the protocol and the value of its token. That’s something crypto projects have long struggled with. As Max Shannon, senior research associate at Bitwise Europe, explains: