Imagine dropping seventy million dollars to support your project’s token, watching the buys roll in day after day, and then… the price barely budges. It’s frustrating, right? That’s exactly what happened with one of the biggest players in Solana’s DeFi space last year, and it’s sparking a fresh debate about whether buybacks even make sense in crypto’s wild token models.
I’ve followed these kinds of stories for years, and this one hits different. It’s not just about one token struggling—it’s a window into the tricky balance between revenue, supply, and real price discovery in decentralized projects.
The Big Buyback That Barely Moved the Needle
Let’s set the scene. Jupiter, the leading swap aggregator on Solana, generated serious fees throughout 2025 thanks to massive trading volume. They decided to funnel roughly half of those earnings into repurchasing their native JUP token. By the end of the year, that added up to over $70 million worth of buys.
On paper, it sounds solid. High activity, steady revenue, direct support for the token—classic playbook stuff. But when you zoom out to the chart, JUP was hovering around $0.20 to $0.22 in early 2026, down nearly 90% from its peak. Ouch.
So what went wrong? The short answer: supply growth outran the buybacks by a mile. But let’s dig deeper, because the details reveal some hard truths about token economics today.
When Unlocks Outpace Everything Else
The core issue boils down to circulating supply. Since Jupiter’s token launch, the amount of JUP in circulation has ballooned by around 150%. That’s a huge influx of new tokens hitting the market regularly.
These aren’t random dumps—they follow a predetermined schedule. Every month through mid-2026, millions more tokens unlock and become available. Specifically, about 53 million JUP per month. That’s consistent, predictable selling pressure, no matter how well the platform performs.
Think of it like trying to bail water from a boat with a big hole in the bottom. The $70 million in buybacks helped, sure, but it only offset a fraction of the new supply flooding in. In the end, the net effect on price was minimal.
The buybacks were never sized to truly counter the emission rate. It’s like fighting a tide with a teaspoon.
Perhaps the most telling moment came when Jupiter’s co-founder floated the idea of stopping the program altogether. He pointed out that the money could instead fuel growth incentives for users—new and old alike. It’s a pragmatic shift, acknowledging that throwing cash at buys wasn’t delivering the intended bang.
A Solana Founder’s Sharp Take on Timing
Then Solana’s co-founder weighed in, and his perspective cut right to the heart of the problem. He argued that in high-emission environments, immediate buybacks don’t fundamentally change seller behavior.
Unlock recipients sell at today’s price, not some hypothetical future value boosted by repurchases. The market prices in the ongoing supply, and spot buys don’t reset that expectation.
Protocols should actually stash the cash for a future buyback. This would force all the unlocks to trade at the future expected post-buyback price.
– Solana co-founder
It’s an interesting angle. By accumulating revenue and deploying it later in larger, concentrated buys—or pairing it with longer staking lockups—you shift the incentive horizon. Holders and unlockers start thinking in years, not days. It mirrors how traditional companies build war chests for strategic repurchases.
In my view, this makes a lot of sense. Short-term buys feel good and signal alignment, but they rarely overcome aggressive vesting schedules. Delaying for impact could create real scarcity events down the line.
Why Supply Schedules Matter More Than Ever
Token unlocks aren’t evil by nature. They’re meant to align early contributors, bootstrap liquidity, and reward the community over time. But when the schedule is front-loaded or overly generous, it creates persistent overhang.
- Monthly cliffs deliver steady sell pressure
- Early investors and teams cash out at peaks
- Retail holders face diluted gains despite protocol success
- Buybacks become maintenance rather than catalysts
Jupiter isn’t alone here. We’ve seen similar dynamics play out across DeFi and beyond. The projects that manage to break free often revise distributions—cutting airdrops, extending vestings, or introducing burns tied to revenue.
In fact, Jupiter already took a step in that direction by slashing their planned 2026 airdrop from 700 million to just 200 million tokens. That’s a meaningful reduction in future supply inflation, and it shows the team is listening to the data.
Alternative Paths for Protocol Revenue
If buybacks aren’t the silver bullet, where should fees go? The debate has surfaced a few compelling options.
First, direct user incentives. Airdrops to active traders, liquidity providers, or loyal holders can drive stickiness and volume. It’s essentially paying for growth rather than fighting supply.
Second, staking programs with meaningful lockups. Reward long-term holders and reduce circulating supply organically. The longer the commitment, the stronger the alignment.
Third, infrastructure investments. Expand products, improve UX, or integrate new chains. Stronger fundamentals eventually reflect in token demand.
I’ve always believed that the best token models tie value accrual directly to irreplaceable utility. When users need the token for governance, discounts, or boosted yields, natural buying pressure emerges. Buybacks can supplement that, but they can’t replace it.
Community Reactions and Mixed Feelings
The conversation stirred plenty of opinions across the ecosystem. Some argue buybacks are essential signaling—proof that the team puts money where its mouth is.
Others side with pausing them when emissions dominate. Why burn cash on marginal impact when you could accelerate adoption instead?
It’s a healthy debate, honestly. Crypto projects are still young, and we’re collectively figuring out sustainable models. Rigid ideology rarely wins; adaptation does.
Lessons for the Broader Crypto Space
This situation offers takeaways far beyond one DEX on Solana.
- Design tokenomics with post-launch reality in mind—aggressive unlocks need equally aggressive demand drivers
- Revenue allocation should evolve based on market conditions
- Timing matters as much as size in buyback effectiveness
- Community governance can help adjust course mid-flight
- Real scarcity often comes from utility and lockups, not just repurchases
Looking ahead, projects launching today have the benefit of hindsight. We’ve seen what happens when supply runs unchecked, and we’re learning smarter ways to deploy treasury assets.
Maybe the era of “buyback everything forever” is giving way to more nuanced strategies. In fast-moving ecosystems like Solana, flexibility might be the ultimate edge.
At the end of the day, strong products win. Jupiter remains a powerhouse for swaps and perpetuals on Solana—billions in volume don’t lie. The token price will likely follow when supply pressure eases and demand compounds.
Until then, stories like this remind us that crypto isn’t traditional finance with extra steps. The rules are still being written, and sometimes seventy million dollars just isn’t enough to fight basic arithmetic.
What do you think—should projects stick with buybacks through thick and thin, or pivot faster to growth and incentives? The debate is far from over, and honestly, that’s what keeps this space so fascinating.
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