Jupiter's multi-million dollar investment has gone down the drain. What can save the price of the token after the buyback fails?

Author: Nancy, PANews

As one of the world's most profitable DeFi protocols, Jupiter's "money power" has failed. Over the past year, it has spent more than $70 million in real money on buybacks, but still could not stop the token from continuing to fall.

Faced with the awkward situation of "the more they buy back, the lower the price drops," Jupiter recently sought feedback from the community, attempting to suspend the buyback narrative and instead explore a new reward paradigm. Furthermore, Helium founder Amir also stated that the market doesn't seem to care about projects buying back tokens from the market, therefore, under the current circumstances, they will stop wasting funds on HNT buybacks.

When simple and crude buyback strategies fail, where is the way to break the curse of falling cryptocurrency prices?

Jupiter's $70 million buyback program has failed to save the cryptocurrency price, prompting the company to consider halting the buyback plan.

While its business is booming, its token price is plummeting. This disconnect is troubling Jupiter, the leading Solana protocol.

As the largest DEX aggregator in the Solana ecosystem, Jupiter is demonstrating remarkable dominance. Its business has expanded from single trading to multiple core areas such as data, wallets, stablecoins, lending, and prediction markets.

This comprehensive expansion has resulted in extremely strong monetization capabilities. According to Cryptodiffer data, Jupiter's total transaction fee revenue reached $1.11 billion in 2025, ranking second among all DeFi protocols.

However, a harsh reality in the industry is that a protocol's earning power does not equate to the token's appreciation potential, and the market seems unconvinced by Jupiter's profit story. CoinGecko data shows that the token JUP experienced a decline of approximately 76.7% throughout 2025.

To support its token value, Jupiter conducted a large-scale buyback, but with limited success. On January 3, Jupiter co-founder SIONG publicly reflected on this strategy on social media and sought opinions from the community on whether to suspend the JUP buyback.

SIONG admitted that Jupiter spent over $70 million on buybacks last year, but the price of the token obviously didn't change much. He suggested that these funds could be used to reward existing and new users to promote growth. "Should we do that?" he asked.

This confusion is not unique to Jupiter. At the same time, Helium, a DePIN project in the Solana ecosystem, made a similar strategic adjustment, announcing that the market seemed unconcerned about project teams buying back tokens, and therefore, under the current circumstances, it would stop wasting funds on HNT buybacks. Helium and Mobile generated $3.4 million in revenue last October alone, preferring to use that money to grow their business.

Stop deceiving yourself; buybacks are not a magic bullet for pumping up prices.

Buybacks are a popular narrative among many crypto projects, but cases like Jupiter's buyback failure are commonplace. Even protocols with strong monetization capabilities and real revenue rarely escape the curse of ineffective buybacks. Simply relying on massive monetary injections to prop up the market is often insufficient to offset sustained market selling pressure or the continuous dilution of token circulation.

The market generally believes that the primary reason buybacks fail is the failure to acknowledge the objective inflationary pressures. Crypto KOL Crypto Weituo points out that all narratives about token rights, income, or buybacks are self-deception. As long as tokens are not fully circulated, continuous unlocking is an unavoidable objective fact. "It's like if you flap your arms faster than a bird, gravity will still pull you down. The issue isn't fighting gravity, but how to utilize it."

DeFi analyst CM further points out that stopping buybacks is fundamentally flawed. Firstly, the true purpose of buybacks is to reduce circulating supply, not to artificially inflate prices, because price is truly determined by market supply and demand and the project's fundamentals. Buybacks are generally beneficial to token holders, and can be viewed as a model of periodic deflation, but they don't guarantee a price increase.

In other words, in the face of continuously released shares, no matter how ingenious the repurchase is designed, it is only a buffer against price declines, and its effectiveness depends on fundamental support and the pace of share release.

In this regard, crypto analyst Emperor Osmo, after comparing buyback tokens in 2025, pointed out that only HYPE and SYRUP achieved positive returns throughout the year. This was attributed to their explosive fundamental growth, with Syrup's revenue increasing fivefold and Hyperliquid experiencing a single-day inflow of over $5.8 billion and early-stage selling pressure. In contrast, Jupiter's DEX aggregator trading volume declined by 74% in 2025, and with deteriorating fundamentals, buybacks alone could not reverse the downward trend.

Crypto researcher Route 2 FI points out a fundamental difference between crypto buybacks and traditional finance from a broader perspective. On Wall Street, if a company decides to buy back shares, it's because the founders or board believe it's the best use of the funds, and buybacks are typically only done when the stock price is severely undervalued . In the crypto space, the opposite is true: buybacks are a defensive mindset, with protocols continuously buying back tokens regardless of price levels. In his view, Hyperliquid's success stemmed from its early period with virtually no selling pressure and a clear value cycle, while Jupiter currently lacks a strong reason to hold its tokens. Without a strong reason to hold, users will naturally sell their tokens to buyback liquidity.

From a valuation bubble perspective, Selini Capital founder Jordi Alexander points out that in this cycle, star projects including HYPE, ENA, and JUP often released millions of tokens at absurdly high prices in their early stages, leading many retail investors to buy in and ultimately get trapped. The founders of these projects were overly enamored with this self-reinforcing mindset, believing these multiples were reasonable. After months of decline, some began to criticize the buyback mechanism as ineffective, but this is also a misjudgment. Furthermore, if a project is successful and has stable revenue, what is the point of the token if there is no buyback, dividend, or clear financial utility? Crypto is finance, and finance is crypto. If you are a serious project, it's okay to not have internal financial experts, but you should at least hire top external consultants or professional firms for assistance.

“The essence of buybacks is to return excess funds to stakeholders,” said monetsupply.eth, Spark’s head of strategy. He questioned whether stopping buybacks would truly improve token performance or only worsen sentiment. More importantly, does the market really believe the team will “reinvest” the money in growth? In his view, the argument for stopping buybacks sounds more like an excuse for founders who, having already profited handsomely from the token, don’t want to incur a bunch of unnecessary operating expenses.

Say Goodbye to Passive Market Stabilization: A Guide to Improving Token Economics

Faced with the frequent failures of buyback strategies, many crypto practitioners have offered improved solutions based on token economics.

Crypto KOL fabiano.sol stated that buybacks and burns remain one of the best deflationary mechanisms, but they take time. Currently, the token is not tied to the company's business; the correct process should be to first give people a reason to hold it before discussing buybacks. Jupiter currently distributes 50 million JUP (approximately $10 million) quarterly as staking rewards, and most people sell their tokens. He suggests that Jupiter could use 50% of its revenue to buy back JUP and place it in Litterbox, buying back $10 million to $20 million worth of JUP quarterly. Another potential solution is to use this $10 million buyback funds for staking rewards, which, based on the current price, could generate an APY of approximately 25%, making it very attractive. While this isn't a direct deflationary mechanism, it's believed to be more beneficial to the token price than simple buybacks.

Solana founder Toly also offered suggestions on staking incentives, arguing that capital formation itself is extremely difficult, typically requiring over 10 years in traditional finance to truly accumulate capital. Compared to buybacks, a more reasonable path is to replicate this long-term capital structure. In the crypto industry, staking is the closest mechanism to this. Those willing to hold long-term will dilute the holdings of those who are not. Protocols can convert profits into protocol assets that can be claimed in tokens in the future, allowing users to lock up and stake their tokens for a year to earn token rewards. As the protocol's balance sheet continues to expand, those who choose to stake long-term will gain a larger share of actual equity. This equity is directly linked to the protocol's future profits and grows with future earnings. This idea was also endorsed by Multicoin co-founder Kyle Samani, who emphasized that crypto teams must design mechanisms that distribute excess value to long-term holders.

Jordi Alexander and CM proposed a more refined improvement plan, both suggesting that projects can adjust the buyback pace based on price or price-to-earnings ratio (P/E ratio): when the token price is significantly undervalued, increase the buyback力度 to consume supply; when market sentiment is overheated and valuations are high, proactively slow down or even suspend buybacks. For decentralized protocols that prioritize transparency, predictability, or legal compliance, a programmatic buyback mechanism can be adopted, setting a clear P/E ratio trigger range based on their own circumstances. Revenue not used for buybacks is then retained for buybacks when prices fall.

Crypto KOLs Emperor Osmo and Route 2 FI believe the team should retain funds and reinvest them in user acquisition, marketing, and incentives to build stickiness, creating long-term competitive advantages through company expansion and acquisitions. Furthermore, building a long-term competitive advantage is far more strategic than passively absorbing selling pressure in the secondary market.

Regardless of the solution chosen, the protocol's profits must be invested in a channel that effectively benefits the protocol's growth, users, and token holders, rather than using various excuses to ultimately allow funds to flow into the team's pockets.