New Trends in the Encryption Field: Token Buybacks Become Mainstream Strategy

In recent years, the cryptocurrency industry has been adopting a strategy similar to that of traditional financial markets, but at a faster pace and on a larger scale. This strategy is token buybacks, and it is being carried out at an astonishing speed and scale.

Currently, the two major revenue engines of the encryption industry—perpetual futures exchanges and Meme coin issuance platforms—are using almost all of their fee income to repurchase their own tokens. This practice is gradually giving encryption tokens the attributes of "shareholder equity representation," which is quite a rare phenomenon in the cryptocurrency field.

The logic behind this is that cryptocurrency projects are trying to replicate the long-standing success path of Wall Street's "dividend aristocrats." These traditional companies provide significant returns to shareholders through stable cash dividends or stock buybacks. However, the buyback efforts of crypto projects even exceed those of these traditional giants.

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A certain perpetual futures exchange has a very clear positioning: it has created a decentralized perpetual futures exchange that combines the smooth experience of a centralized exchange while completely operating on-chain. The platform supports zero gas fees and high-leverage trading, and it is a Layer 1 focused on perpetual contracts. By mid-2025, its monthly trading volume had exceeded $400 billion, capturing about 70% of the DeFi perpetual contract market.

What truly sets this platform apart is its approach to fund utilization. The platform allocates over 90% of its fee revenue to a "support fund" every day, which is directly used to purchase platform tokens in the open market. This operation reduces the circulating supply of tokens by approximately 9%, driving a significant increase in token prices.

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Another Meme coin issuance platform has adopted a similar strategy, reducing the circulating volume of tokens by approximately 7.5% through buybacks. This platform converts the "Meme coin craze" into a sustainable business model with extremely low transaction fees: anyone can issue tokens on the platform and build a "bonding curve", allowing market enthusiasm to ferment freely.

However, this model also has its risks. The revenue of the Meme coin platform is clearly cyclical, as its income is directly tied to the popularity of Meme coin issuance. When the "Meme season" cools down, the Token buyback will also shrink accordingly. In addition, the platform is facing huge lawsuits, being accused of operating "similar to illegal gambling."

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The core support for these two platforms currently lies in their willingness to "return profits to the community." They consistently distribute nearly 100% of their income back to Token holders every day, and this model is sustainable. However, compared to cash dividends, buybacks are at most a "price support tool"—once income declines or the amount of unlocked Tokens far exceeds the buyback amount, the effectiveness of the buyback will be lost.

Whether this model can be sustained in the long term is still inconclusive. However, it is evident that it has for the first time liberated encryption tokens from the label of "casino chips," bringing them closer to "company stocks that can create returns for holders."

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The success of these two platforms lies in the fact that they do not use the cash generated from their business for reinvestment or hoarding, but rather convert it into "purchasing power that boosts the demand for their own Token." This has also changed investors' perception of encryption assets. Traders have begun to form a new understanding—these assets, in their eyes, come with a clear commitment: every consumption or transaction based on that Token has over a 95% chance of being converted into "market buybacks and burns."

However, the strength of buybacks always depends on the intensity of the cash flow behind them. Once trading volume shrinks, buybacks will also come to a halt. More importantly, these encryption protocols currently have no "backup plans" to deal with potential crises.

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For cryptocurrencies, there is also the risk of "token dilution." Starting from November 2025, a certain platform will face a situation where a large number of tokens will be unlocked for internal personnel, far exceeding the daily repurchase volume. In this case, the encryption protocol will be subject to a token unlocking schedule that was "written in black and white" many years ago.

Even so, investors still see the value in it and are eager to participate. These encryption platforms are attempting to replicate the successful path of traditional financial giants in the encryption field, but with a faster pace, greater momentum, and higher risks.

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