Keyrock: Crypto’s Buyback Boom Tests the Industry’s Financial Maturity

Token buybacks in crypto are being seen as a sign of maturity, but they could drain resources necessary for growth. Amir Hajian, from market making firm Keyrock, notes that while payouts to token holders have surged over 400% since 2024, much of this funding comes from treasuries rather than ongoing revenue streams. He emphasizes that this can limit future growth opportunities. Token buybacks, akin to stock buybacks, create scarcity which can potentially increase the token's value. However, the focus is shifting toward more disciplined financial strategies, linking buybacks to market conditions and financial metrics to ensure sustainability. Some protocols are adopting innovative trigger-based systems that tie repurchases to measurable fundamentals, while others use options-based models for future commitments, enhancing treasury health. Hajian argues that first-year buybacks often happen too early by newer projects, draining reserves needed for product development. Ultimately, the ability to wait for the right fundamentals before initiating buybacks could define a project's financial maturity.

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