The post Crypto’s Buyback Boom Tests the Industry’s Financial Maturity appeared on BitcoinEthereumNews.com.

As token buybacks gain popularity in crypto, Amir Hajian, head of research at market making firm Keyrock, warns in a new report that every dollar spent repurchasing tokens is a dollar diverted from growth and innovation, underscoring the hidden opportunity cost behind the show of confidence. Token buybacks involve blockchain projects repurchasing their own tokens from the open market, similar to stock buybacks. The strategy sucks out circulating supply from the market, creating scarcity and potentially increasing the token’s value to signal confidence to investors. The rise of token buybacks marks a turning point in how crypto defines maturity, Hajian argues in the report shared with CoinDesk, writing that what began as an effort to prove that protocols could return value like companies has become a stress test of their financial realism. The key point is whether protocols can repurchase with the restraint of a central bank rather than the twitchy reflexes of a bull market. Much of this capital for buybacks comes from treasuries rather than recurring revenue, exposing how quickly the pursuit of legitimacy can drain future runway. (Keyrock) With clearer rules forming in the U.S. for crypto and protocols finally generating consistent fee income, token buybacks have emerged as the preferred way to link revenue to holder value. Hajian finds that protocol payouts to token holders have risen more than 400% since 2024, hitting nearly $800 million in the third quarter of 2025. Across 12 revenue-distributing protocols studied, teams returned an average of 64% of total revenue to holders, far higher than traditional DAOs, which reinvest roughly three-quarters of spending into growth and development. That tilt toward distributions over reinvestment, Hajian writes, has forced protocols to confront the limits of one-time treasury spending. As markets mature and revenues normalize, projects can no longer afford buybacks that treat…

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Filed under: News - @ October 24, 2025 5:27 am