Solana founder Toly: Instead of buybacks, a long-term capital structure should be built through pledging mechanisms.

PANews reported on January 3 that Solana founder Toly responded to a question from Jupiter co-founders on the X platform regarding "whether to continue token buybacks or provide growth incentives for existing users," stating:

"Capital formation itself is extremely difficult—traditional finance typically takes more than 10 years to truly accumulate capital. Compared to buybacks, I believe a more reasonable path is to replicate this long-term capital structure. In the crypto industry, the closest mechanism to this is staking. Participants 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."

When asked how to prevent Delta Neutral short-selling arbitrage, Toly said: "The equity itself is linked to the future profits of the agreement and continues to grow with future earnings."