DeFi $800M Buybacks Yield No Boost; Real Growth Needed
DeFi buybacks surged as leading protocols spent $800 million on token repurchases and dividends in 2025, a 400% year-on-year increase. Aave (AAVE) ran a $1 million weekly repurchase at a loss, MakerDAO’s (MKR) Smart Burn Engine briefly lifted prices, and Ether.fi (ETHFI) approved $50 million to defend its token under $3. PancakeSwap (CAKE) and Synthetix (SNX) executed programmed buybacks and burns, while GMX paused repurchases amid falling fees. Hyperliquid (HYPE) stood out, allocating $645 million—46% of the total—and driving a 500% token surge on the back of real revenue and user growth.
Despite theory that buybacks reduce supply and signal confidence, most DeFi buybacks faltered due to poor timing at market peaks, reliance on treasury reserves, and dilution from token unlocks. Total value locked recovered to $160 billion, but secondary market liquidity and speculative capital remain muted. Traders should focus on fresh capital inflows, sustainable growth cycles, and robust tokenomics rather than short-term repurchase strategies to drive lasting market support.
Bearish
While token buybacks can trigger short-term spikes—as seen with MakerDAO and Hyperliquid—the bulk of DeFi buyback programs failed to sustain momentum. Poor timing at market highs, dependence on finite treasury reserves, and dilution from token unlocks undermined lasting price support. Although total value locked has rebounded, secondary market activity remains subdued. Traders should expect continued sideways or downward pressure on most affected tokens. Sustainable gains will depend on fresh capital inflow and robust growth cycles rather than repurchase tactics alone, indicating a bearish outlook for near-term price action.