$820M Buyback Boom: Crypto Projects Shift Focus from Revenue to Value Accrual

Crypto projects have been adopting a new strategy to reward token holders and create value for their governance tokens. This approach, known as buybacks, has become increasingly popular in the past year, with $820m spent on token buybacks in 2024 alone.

Historically, crypto projects have struggled to capture the value created by their protocols and translate it into positive price action for their governance tokens. However, buybacks aim to change this by returning a portion of the revenue generated by a project's protocol back to its token holders.

The first major example of this model was Hyperliquid, which has been followed by similar mechanics from Aave, Uniswap, and others. But what's key is not just the buyback itself, but how it interacts with other aspects of the project's economics, such as emissions and unlocks.

Experts now recommend evaluating crypto buybacks like their equity counterparts, taking into account factors such as adjusted for emissions and unlocks. This approach can help to accurately assess the true value created by a project's revenue and better inform investment decisions.