This reduces circulating supply, creates upward price pressure, and aligns incentives between users, holders, and builders.
Buybacks create a “flywheel effect”:
Real revenue → Token buybacks → Supply reduction → Token value appreciation → More users attracted → More revenue generated.
Why it matters
Sustainability: Token value is directly tied to real revenue, reducing reliance on inflationary emissions.
Anti-dilution: Protects existing holders from excessive inflation.
Rewards real users: Long-term value accrues to stakers and users, not just development teams.
Drives real growth: Encourages projects to focus on genuine revenue growth and sustainable competition, similar to dividend models in TradFi.
Solves the “Ouroboros problem”: Eliminates circular, unsustainable yield loops and pushes DeFi toward maturity.
Leading Projects
Flying Tulip ($FT):
Describe: An all-in-one DeFi platform (trading, lending, stablecoin, insurance, perpetual options) implementing buyback & burn through real yields (8–12% APY on ftUSD).
Backed by: Andre Cronje, Big VCs like Brevan Howard, CoinFund, DWF Labs
Raised $200M seed at a $1B valuation, gearing up for a major public sale. Buybacks and burns start from day one, creating deflationary pressure.
Aave:
Describe: The leading lending protocol performing weekly buybacks using protocol fees.
Backed by: Stani Kulechov & Big VCs.
Over $1M repurchased per week, leading DeFi in revenue (~$600M/month).
dYdX:
Describe: A decentralized derivatives exchange allocating 25% of net revenue for token buybacks.
Backed by: Paradigm, a16z, and Polychain.
Initiated buybacks after surpassing $46M in 2024 revenue.
Hyperliquid ($HYPE):
Describe: A high-speed DeFi platform conducting burns and buybacks up to 99% of its revenue.
backed by Binance Labs and supported by a strong community.
Currently one of the standout projects in the 2025 buyback trend.
MakerDAO ($MKR):
Describe: The stablecoin issuer operating a buy-and-burn model funded by stability fees.
Backed by: a16z and Placeholder.
Maintains sustainable buybacks and stands at the center of DeFi’s TVL resurgence ($200B+).
Raydium ($RAY):
Describe: A Solana-based AMM executing automatic buybacks from trading fees, benefits from its position as the #1 DeFi protocol on Solana with over $9B TVL.
GMX:
Describe: A perpetual DEX funding buybacks with protocol fees.
Backed by: Binance and Delphi Digital.
Has repurchased millions worth of tokens, focusing on sustainable growth.
How to Participate
Buy and hold tokens of buyback-oriented protocols on reputable DEXs or CEXs.
Stake or provide liquidity to earn a share of buyback rewards or protocol fees.
Invest in stablecoin/lending products (e.g., Flying Tulip’s ftUSD) to earn real APY returns.
Track buyback dashboards (e.g., on DeFiLlama) and capitalize on price movements during buyback events.
Risks
Buybacks don’t guarantee price appreciation: Market sentiment, narrative shifts, and token unlocks still affect price.
Capital inefficiency: Protocols may overpay for buybacks at peaks (e.g., GMX, SNX).
Regulatory risks: Tokens could be classified as securities; smart contracts may contain bugs.
Revenue dependency: Buybacks may slow during bear markets with low fee income.
Not all buyback projects are sustainable: Always DYOR before investing.
