Decentralized Finance 学华尔街：8 亿美元回购潮能买回信心吗？

Original Title: Why Buybacks Can't Save DeFi?

Original author: BitPush

Source:

Reprint: Daisy, Mars Finance

The year 2025 will not be easy for DeFi projects, but they have indeed learned a trick from Wall Street: expressing confidence through buybacks.

According to a report by the crypto market maker Keyrock, the top 12 DeFi protocols spent about $800 million on buybacks and dividends in 2025, a 400% increase compared to early 2024.

Analyst Amir Hajian wrote: “Just as publicly listed companies use buybacks to convey long-term commitments, DeFi teams also hope to demonstrate that they are profitable, have cash flow, and have a future.”

But in a market where liquidity is scarce and risk appetite is low, are these actions of “rewarding token holders” a return to value or just a waste of money?

Who is involved in the buyback craze?

This round of buybacks has extended from Aave and MakerDAO at the beginning of the year to later PancakeSwap, Synthetix, Hyperliquid, and Ether.fi—covering almost all major tracks of Decentralized Finance.

Aave (AAVE) is one of the leading projects that launched systematic buybacks early on.

Starting from April 2025, Aave DAO will use protocol revenue to repurchase approximately 1 million USD worth of AAVE each week, and will discuss normalizing the mechanism in October, with an annual budget of up to 50 million USD.

On the day the proposal was approved, AAVE briefly rose by 13%, but the paper profit was negative after a six-month pilot.

MakerDAO (MKR) launched the Smart Burn Engine in 2023, using DAI surpluses to regularly buy back and burn MKR. In the first week of the mechanism going live, MKR rebounded by 28%, being hailed as an example of “cash flow returning to token holders.”

However, a year later, the market presents a paradox of “confidence restoration, valuation lag.”

Despite the strong fundamentals (MakerDAO continuously increasing DAI reserve income through real-world assets RWA), the MKR price (fluctuating around $1,800 as of the end of October 2025) is still only one-third of the historical peak during the 2021 bull market (approximately $6,292).

The latest proposal from the Ethereum liquidity staking protocol Ether.fi (ETHFI) is undoubtedly the most关注的 “big move” recently. The DAO is authorized to buy back ETHFI in batches below $3, with a maximum of $50 million, and will conduct a quick vote on Snapshot, aiming to “stabilize the coin price and restore confidence.”

However, the market is equally vigilant: if the funds primarily come from treasury reserves rather than sustainable income, this kind of “market support buyback” is ultimately bound to lose momentum.

PancakeSwap (CAKE) has chosen the most programmatic path. Its “Buyback & Burn” mechanism has been integrated into the token model, with net inflation data disclosed monthly. By April 2025, CAKE's net supply will have decreased by 0.61%, entering a state of continuous deflation.

But the price still hovers just above $2, far below the $44 peak in 2021—improvements in supply have brought stability, not a premium.

Synthetix (SNX) and GMX are also using protocol fees to buy back and burn tokens.

Synthetix writes a buyback module in the 2024 version update, while GMX automatically allocates a portion of trading fees to the buyback pool.

Both experienced a rebound of 30% to 40% during the buyback peak period in 2024, but when the stablecoin peg was under pressure and fees declined, they both suspended buybacks and shifted funds towards risk preparation.

The real “exception winner” is the perpetual contract platform Hyperliquid (HYPE).

It treats buybacks as part of the business narrative: a portion of the protocol's revenue automatically enters the secondary market buy order pool.

According to Dune, Hyperliquid has accumulated an investment of $645 million over the past year, accounting for 46% of the entire industry, and its HYPE token has increased by 500% since its issuance in November 2024.

But the success of HYPE relies not only on buying pressure but also on revenue and user growth—daily trading volume has tripled in a year.

Why do buybacks often “fail”?

From the perspective of traditional financial logic, the reason buybacks are highly sought after is mainly based on three points:

First, it promises to enhance the value share. The protocol repurchases and destroys tokens with real money, and a decrease in circulation means that each token will enjoy a higher future right to earnings.

Secondly, it conveys governance confidence. The willingness to initiate buybacks indicates that the protocol possesses profitability, financial leeway, and governance efficiency. This is seen as an important sign of DeFi's transition from “burning money for subsidies” to “operational dividends.”

Furthermore, it shapes the expectation of scarcity. When combined with mechanisms such as locking and reduction, buybacks can create a deflationary effect on the supply side, optimizing the token economic model.

However, theoretical perfection does not equate to practical feasibility.

Firstly, the timing choice often backfires. Most DAOs are generous in a bull market, but cut funding in a bear market, creating an awkward situation of “buying high and waiting low,” which is contrary to the original intention of value investing.

The source of funds often raises concerns. Many projects use treasury reserves instead of continuous profits, and once income declines, buybacks become an unsustainable way of “putting on a brave face.”

There is also the opportunity cost. Every dollar used for buybacks means one less dollar invested in product iteration and ecosystem development. Market maker Keyrock issued a warning in October: “Excessive buybacks may be one of the least efficient ways of capital allocation.”

Even with buybacks, their effect can easily be diluted by ongoing unlocks and new token issuances. When supply-side pressure does not decrease, limited buybacks are like a drop in the bucket.

Messari researcher Sunny Shi pointed out:

“We have not found that the market will continue to raise valuations due to buybacks; prices are still determined by growth and narrative.”

Additionally, the macro liquidity structure of the entire DeFi market has changed. Although the total locked value (TVL) has strongly rebounded to a three-year high (approximately $1600 billion USD), there is still a gap compared to the historical peak during the 2021 bull market (around $1800 billion USD). More importantly, while protocol revenue and capital utilization rates are high, the trading volume in the secondary market and the inflow speed of speculative hot money still need time to fully return to the “euphoria” state of the previous cycle.

In a capital-constrained environment, even the most generous buybacks cannot offset the structural issues of insufficient demand.

Confidence can be bought back for a moment, but only real capital inflows and growth cycles can allow Decentralized Finance to “self-generate” again.