Token buybacks cannot save coin prices! Messari analysts: Sustainable protocol revenue is the key.

The Crypto Assets market has experienced turbulence, with many protocols adopting Token buybacks as a strategy to stabilize stablecoin prices. However, Messari analysts and community perspectives indicate that buybacks are merely an auxiliary measure and not a long-term solution.

Buybacks are not a panacea: Messari analyzes two major risks

Messari analyst Monk tweeted yesterday that programmatic token buybacks do not effectively prevent coin price declines, and may instead lead to capital misallocation. He listed two major issues: "High-price buybacks in bull markets lead to cash depletion," and "In bear markets, lack of funds results in a loss of innovative flexibility."

RAY, GMX, GNS and SNX have programmatically bought back millions in tokens which are now worth way below cost.

This is the programmatic Token buyback fallacy:

1. Irrelevant to price action which is driven by revenue growth and narrative formation.

2. When revenues are strong… pic.twitter.com/4G6wBFHcgF

— MONK (@defi_monk) March 20, 2025

He pointed out that the buyback is unrelated to the narrative-driven price trends, and this practice instead leads to inefficiencies in capital allocation:

The protocol should focus on growth and practicality, prioritizing the return of value in the form of stablecoins or major currencies, such as the models of veAERO or BananaGun.

A report published by Monk on Messari indicates that even when tokens such as RAY, GMX, GNS, and SNX implement buybacks, their prices still plummet, highlighting the fact that buybacks cannot support coin prices.

As one user commented: "A simple buyback cannot save the Token; they are merely a tool, not a solution."

Sustainable value comes from real utility and protocol revenue. These charts illustrate why fundamentals are more important than financial engineering. The focus should be on building, not temporary fixes.

(The Crossroads of DeFi Giants: Uniswap's $165 million proposal sparks controversy, is it an incentive or a waste?)

Review of Aave's million-dollar repurchase plan, the launch burn mechanism of Maker (Sky).

Recently, Aave is preparing to implement a weekly buyback plan of 1 million USD, using its Aavenomics governance mechanism to repurchase and distribute income to stakers, aiming to boost the Token price. However, the actual effectiveness has been poor, with AAVE Token dropping 55% in 90 days and 30.6% in 30 days.

The new version of Aavenomics has received overwhelming support from Aave DAO.

Additionally, starting from August 2023, Make ( has been renamed to Sky), which utilizes its "Smart Burn Engine (" to repurchase and burn MKR using excess DAI, thereby strengthening the stability of DAI's peg to the US dollar.

Even though this event led to an increase of approximately 224% for MKR until January 2024, it has since fallen over 70% from its peak, indicating that long-term value is still constrained by protocol growth and market sentiment.

Monk warns that even if buybacks boost demand, it is still difficult to support prices without income growth and positive narratives.

If reserves are spent on buybacks when the market weakens or even stagnates, it is more likely to lead to the protocol's inability to innovate products or respond to potential crises, highlighting the short-term effects of buybacks on coin price support and long-term risks.

)Sky founder proposal: Add Token deflation model, decision on the 14th whether to restore MKR name(

Construction is the key: we should pursue long-term value creation.

Even though Aave and Maker's cases cannot currently confirm Monk's core viewpoint, they can indeed serve as important references for future agreements on buyback plans:

Token buybacks may have short-term effects, but they cannot solve the fundamental problems. If the protocol lacks sustainable income, a clear narrative, and innovative momentum, buybacks will ultimately be a waste of resources.

Monk suggests that resources should be allocated in a strategic manner, emphasizing the value feedback in the form of stablecoins to avoid falling into an endless cycle of waste. This may be the fundamental way to traverse bull and bear markets and achieve long-term success.

This article states that the Token buyback cannot save the coin price! Messari analysts: Sustainable protocol revenue is the key. First appeared in Chain News ABMedia.