DeFi Projects Using Token Buybacks to Boost Value

A new analysis by The DeFi Investor highlights several blockchain projects that are actively repurchasing their native tokens, a strategy aimed at reducing supply and potentially increasing price. The protocols are categorized by market capitalization, showing how buybacks are used across different scales.

Buyback Activity Across Market Caps

• Under $50 Million: Smaller projects like Silo Finance (SILO) and Gearbox (GEAR) are using buybacks to create a more noticeable impact on their low-liquidity tokens.
• $50 Million - $500 Million: Mid-tier players such as Kaito (KAITO) and Aevo (AEVO) use buybacks as a marketing tool and to help manage token inflation.
• $500 Million - $1 Billion: Larger projects in this segment, including EtherFi (ETHFI) and dYdX (DYDX), have deeper liquidity. For them, buybacks are more about long-term value than immediate price impact.
• Over $1 Billion: Major protocols like Chainlink (LINK) and AAVE (AAVE) use buybacks as part of a larger treasury management and incentive strategy.

The Buyback Caveat

The analyst noted that while buybacks can be a sign of a project team's confidence, their effectiveness can be limited. Many DeFi projects have an unlimited token supply and high inflation to fund rewards. This means that if new tokens are issued faster than they are repurchased, the overall effect on supply and price can be diluted. The long-term impact of these buyback strategies, especially for larger projects, is something traders are watching closely.

August 2025, Cryptoniteuae