Crypto Token Buybacks Surge as Hyperliquid Reshapes Token Economics
Crypto projects have spent approximately $640 million buying back native tokens so far in 2026, compared with $545 million over the same period last year, according to Allium Labs data reported by the Financial Times.
Summary:
- Revenue-funded buybacks are becoming a more prominent part of token economics.
- Hyperliquid operates one of the industry’s most aggressive models by directing almost all eligible trading fees toward HYPE purchases.
- Sky has also deployed capital for repurchases, while Lido is preparing a revenue-dependent mechanism.
- Buybacks can support token demand, but unlocks, emissions and selling pressure can offset their effect.
Almost 90% of that activity came from Hyperliquid and pump.fun, showing that the growing use of buybacks is still concentrated among a small number of protocols.
Hyperliquid ties trading activity directly to HYPE demand
Hyperliquid has built one of the clearest links between protocol usage and its native token.
Its Assistance Fund receives approximately 99% of eligible trading-fee revenue and uses those funds to purchase HYPE on the open market. Tokens accumulated by the fund are effectively removed from circulating supply following a validator governance decision.
The mechanism creates a direct economic sequence:
- Trading activity → protocol fees → HYPE purchases → lower available supply
That differs from token models built primarily around emissions or incentive distributions. Higher activity on Hyperliquid can generate additional market demand for HYPE without requiring a separate discretionary decision to authorize each purchase.
Cumulative repurchases since HYPE’s launch in December 2024 have been valued at roughly $1.3 billion.
That figure covers the entire period since launch and should not be confused with this year’s industry-wide spending.
The scale reflects Hyperliquid’s unusually strong fee generation. It also means the protocol can maintain its program using operating activity rather than drawing down a fixed treasury reserve.
The headline record is still highly concentrated
The industry total gives the impression that buybacks have become standard across crypto. The underlying distribution tells a different story.
With Hyperliquid and pump.fun responsible for the overwhelming majority of current spending, most protocols remain far smaller participants.
Sky Protocol, for example, has repurchased approximately $26 million of its native tokens this year.
The gap matters because it separates two developments that can otherwise be conflated: more projects are experimenting with buybacks, but only a few currently generate enough revenue to execute them at substantial scale.
For the model to become a broader feature of token economics, buyback activity would need to expand across protocols rather than remain dependent on two unusually high-revenue platforms.
Lido puts revenue conditions ahead of automatic purchases
Lido is taking a more conservative approach.
Its proposed NEST mechanism links recurring LDO purchases to protocol revenue rather than automatically directing fees toward the market.
Regular buybacks can activate once annualized staking revenue exceeds $40 million. Above that level, part of the surplus becomes available for LDO purchases, subject to spending limits.
This creates a different hierarchy:
- Revenue threshold → surplus generation → LDO purchases
The protocol therefore preserves revenue below the threshold rather than committing it immediately to token demand.
Lido estimates that, given its current market share and staking economics, the condition corresponds to an ETH price of approximately $2,730. That means recurring purchases are designed to expand when the protocol’s underlying economics can support them rather than operating regardless of market conditions.
Lido has separately completed opportunity-driven purchases totaling around 10 million LDO, equivalent to roughly 1% of supply, with the acquired tokens returned to the DAO treasury.
READ MORE: Crypto ETF Inflows Hit $2.07B as Ethereum Sets 2026 Record
Hyperliquid and Lido therefore illustrate two distinct approaches. One continuously converts eligible operating revenue into token purchases; the other makes recurring repurchases conditional on financial performance.
Why buybacks do not automatically lift token prices
The appeal of the mechanism is straightforward: a protocol creates demand for its own token while potentially reducing available supply.
Price performance is less straightforward.
Tokens such as Jupiter and Chainlink have remained under pressure despite significant repurchase activity, according to the Financial Times. That shows why the size of a buyback program cannot be evaluated in isolation.
Several competing flows can overwhelm it:
- Token unlocks can release previously restricted supply.
- Emissions can continuously add new tokens to circulation.
- Treasury distributions can create additional selling pressure.
- Early investors and insiders may sell into buyback-generated liquidity.
- Falling protocol activity can reduce the revenue available for future purchases.
A protocol buying $20 million of tokens while $100 million of newly unlocked supply reaches the market has a very different supply profile from one buying the same amount with no major unlocks scheduled.
The source of the capital is equally important.
Repurchases funded by recurring fees can potentially continue as long as users generate sufficient revenue. Treasury-funded programs consume an existing pool of assets and therefore have a natural limit unless new income replenishes it.
Buyback yield may matter more than the dollar amount
Headline spending provides only a partial view of the economic effect.
A more useful framework is to compare annualized repurchases with the token’s circulating market capitalization.
For example, $50 million in yearly purchases against a $500 million circulating valuation represents substantially more potential market pressure than the same spending against a $10 billion token.
Investors can therefore examine several variables together:
- Annualized buyback value.
- Circulating market capitalization.
- Buyback yield.
- Protocol revenue supporting the program.
- Token unlocks and emissions.
- Whether purchased tokens are burned, locked or returned to a treasury.
The final point is particularly important.
Buying tokens does not necessarily reduce total supply. A permanent burn has a different effect from transferring tokens into a DAO treasury that could eventually spend or distribute them again.
That distinction can disappear when every repurchase program is described simply as a “buyback.”
Revenue is becoming harder to separate from token valuation
The expansion of buybacks gives investors more measurable data than many early token models provided.
A protocol generating substantial fees can now be evaluated not only by user activity or total value locked, but also by how much of that economic activity reaches its token.
That still does not make a crypto token equivalent to a stock. Tokenholders generally lack the legal ownership rights and contractual claims on corporate cash flows held by shareholders.
Instead, buybacks create an economic link whose strength can be measured.
Hyperliquid currently represents the aggressive end of that spectrum, converting almost all eligible fee revenue into HYPE demand.
Lido is building a model that activates only after its revenue clears a defined threshold. Sky provides another example of protocols allocating capital toward repurchases without adopting Hyperliquid’s near-total fee sweep.
The next useful metric for the sector is therefore not another record dollar figure. It is how much recurring protocol revenue reaches tokenholders relative to dilution. A buyback program that purchases less supply than unlocks and emissions create may look impressive in dollar terms while doing little to improve the token’s underlying supply dynamics.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
