Recently, several cryptocurrency projects have adopted buyback programs to strengthen their market charts. Aster is one of the latest examples, announcing a buyback initiative and revealing a wallet address where millions of dollars' worth of tokens were repurchased. This approach targets excess tokens in circulation to positively influence price trends.
Following Aster’s move, ETHFI has seen a nearly 5% price rise. However, concerns arose as the price dipped below $3. In response, the EtherFi DAO proposed allocating $50 million from its treasury to buy back tokens. The governance proposal highlights:
“The price being below $3 is unacceptable, and token buyback should continue as long as ETHFI remains under this threshold.”
ETHFI’s price fell 89% from its 2024 peak, reaching $0.93 recently.
Protocols with steady revenue streams use buybacks to counteract price declines. Redirecting earnings to these programs can offset weak token demand in secondary markets and help restore prices to appropriate levels.
Author’s summary: Crypto projects, including ETHFI and Aster, increasingly rely on buybacks funded by treasury reserves or protocol revenues to stabilize token prices and strengthen investor confidence amidst market pressures.