The illusion that token buybacks equal alignment
Quote275 words
Argues buybacks only absorb sell pressure while dilution continues, and unlike equity buybacks do not retire claims on earnings. Hyperliquid worked because of lean team, no VC overhang and no heavy unlocks.
Key claims
Jupiter: $70M buybacks vs $1.2B unlocks
Helium paused buybacks
Hyperliquid's buybacks reinforced alignment rather than creating it
Great read by our @a1research__ analyst @sakshimiishra on the illusion of "buybacks = alignment".
The fallacy lies in equating revenue deployment with real token-protocol alignment.
Buybacks make it feel like the token finally has utility and holders are being rewarded.
In reality tho, they temporarily absorb sell pressure while structural dilution continues unabated.
The math that matters:
- Jupiter: $70M buybacks against $1.2B in unlocks. A floor, not a catalyst.
- Helium: paused buybacks entirely. Capital better deployed elsewhere.
Markets price net flows. If upply dominates, buybacks lose.
But why do ppl still fall for the "buybacks" narrative?
Hyperliquid.
It was the one case that worked and broke everyone's model.
However, that was not a coincidence.
HL is just built different.
Lean team, zero VC overhang, no deadly unlock schedules like many other projects have.
Or in other words: In Hyperliquid's case, buybacks reinforced alignment rather than creating it.
There is also a structural gap worth noting.
Buybacks are an equity thing.
Tokens are different.
When Apple buys back stock, shares are permanently retired. Each remaining shareholder's claim on future earnings increases proportionally.
Plus, the shares provide enforceable ownership, governed by securities law.
Crypto buybacks are NOT the same.
Tokens often get recycled into emissions, incentives, or ecosystem funds. Governance rights exist on paper but rarely get exercised.
Treasury allocation remains at team discretion. You're not buying a claim on anything, you're buying a speculative asset in the hope that (mainly driven by hype) it becomes more valuable.
So buybacks ≠ up only bull case.
The key question remains: Does holding the token still make sense AFTER the buyback?
If not, you're the exit liquidity.
QUOTING @sakshimiishra
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