Jupiter's $70 million buyback fails! Token price plummets 76% revealing a fatal flaw

Jupiter is the largest DEX on Solana, with 2025 revenue of $1.11 billion ranking second in DeFi, but JUP has fallen 76.7%. A $70 million buyback still cannot stop the decline. On January 3rd, co-founder SIONG solicited opinions on suspending buybacks, and Helium also stopped HNT buybacks on the same day. The failure is due to token unlock inflation and lack of holding reasons.

The Myth of Jupiter Buybacks Shattered: The Harsh Divide Between Profit and Price Appreciation

Jupiter’s business data is impressive. Its reach has extended from single trading to data, wallets, stablecoins, lending, prediction markets, and other core areas, bringing strong monetization capabilities. Cryptodiffer data shows that in 2025, Jupiter’s total fee income will be $1.11 billion, second only to Ethereum, far surpassing many well-known DeFi protocols.

However, the protocol’s profitability does not equate to token appreciation. CoinGecko data shows that JUP fell approximately 76.7% throughout 2025, crashing from its high. To support the token’s value, Jupiter conducted large-scale buybacks, but the effect was bleak. SIONG admitted that Jupiter spent over $7 million on buybacks last year, but the token price clearly did not change much. He suggested that this capital could be used to reward existing and new users to promote growth.

This confusion is not unique to Jupiter. At the same time, Solana ecosystem’s DePIN project Helium also made similar strategic adjustments, announcing that the market does not seem to care if the project team repurchases tokens, so under current circumstances, they will stop wasting funds on HNT buybacks. Just last October, Helium and Mobile generated $3.4 million in revenue, preferring to use that money to develop the business.

Crypto analyst Emperor Osmo pointed out after comparing buyback tokens in 2025 that only HYPE and SYRUP achieved positive returns throughout the year, thanks to their explosive fundamental growth. Syrup’s revenue increased fivefold, Hyperliquid saw daily inflows of over $5.8 billion with almost no selling pressure early on. In contrast, Jupiter’s DEX aggregator trading volume declined 74% in 2025. Under deteriorating fundamentals, buybacks alone cannot reverse the downward trend.

Dual Crushing of Inflation Pressure and Valuation Bubble

The market generally believes that the failure of buybacks is primarily due to ignoring the objective existence of inflation pressure. Crypto KOL Crypto Vetu pointed 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 swinging your arm faster than a bird, but gravity still pulls you down. The problem is not fighting gravity but how to utilize it.

Three Fatal Flaws of Buyback Failures

Inflation Pressure Cannot Be Countered

· Continuous token unlocks dilute circulating supply

· Buyback speed far below token release rate

· No matter how sophisticated the buyback design, it’s just a buffer for price decline

Lack of Fundamental Support

· Jupiter DEX trading volume down 74%

· Lack of strong reasons to hold tokens

· Users sell tokens to fund buybacks, creating a vicious cycle

Early Valuation Bubble Risks

· Early deployment of hundreds of millions of tokens at absurdly high prices

· Many retail investors follow the trend and buy in, ultimately getting trapped

· Founders overly obsessed with self-reinforcing thinking

DeFi analyst CM further pointed out that stopping buybacks is fundamentally wrong. The true purpose of buybacks is to reduce circulating supply, not to 100% pump the price, because what truly affects the price are market supply and demand and the project’s fundamentals. Buybacks are beneficial to token holders and can be imagined as a regular monetary tightening model, but they do not necessarily cause the token to rise.

Jordi Alexander, founder of Selini Capital, from a valuation bubble perspective, pointed out that in this cycle, star projects including HYPE, ENA, and JUP often launched hundreds of millions of tokens at absurdly high prices early on, leading many retail investors to follow and get trapped. If buybacks are stopped, will it really improve token performance, or will it only further worsen sentiment? More importantly, does the market truly believe the team will reinvest the money into growth?

From Passive Support to Active Growth: The Breakthrough Path

Crypto researcher Route 2 FI from a macro perspective pointed out the fundamental difference between crypto buybacks and traditional finance. In Wall Street, companies decide to buy back shares because founders or boards believe it’s the best use of capital, usually only when stock prices are severely undervalued. In crypto, the situation is the opposite: buybacks are a defensive mindset, with protocols continuously repurchasing tokens regardless of price levels.

Many crypto practitioners have proposed improved tokenomics solutions. KOL fabiano.sol said that buyback and burn remain one of the best deflationary mechanisms, but it takes time. Currently, tokens are not tied to company operations; the correct process should be to first give people a reason to hold, then discuss buybacks. He suggested Jupiter could use 50% of revenue to buy back JUP and put it into Litterbox, repurchasing $10-20 million worth of JUP each quarter.

Solana founder toly proposed staking incentives, believing that the closest long-term capital structure mechanism is staking. Participants willing to hold long-term will be diluted in the mechanism, favoring long-term stakers. The protocol can accumulate profits as future claimable assets, allowing users to lock and stake for a year to earn token rewards. As the protocol’s assets and liabilities continue to expand, long-term stakers will gain a larger share of actual rights.

Jordi Alexander and CM proposed more detailed plans, suggesting projects adjust buyback pace based on price or P/E ratio: increase buybacks when tokens are significantly undervalued; slow down or pause when market sentiment is overheated and valuations are high. For transparent decentralized protocols, a programmatic buyback mechanism can be adopted, setting clear P/E trigger ranges based on their situation.

Emperor Osmo and Route 2 FI believe that teams should retain funds and reinvest into user acquisition, marketing, and incentives that generate stickiness, building long-term barriers through expanding the company and acquiring protocols. Building long-term competitive advantages is more strategic than passively absorbing sell pressure in the secondary market.