In the world of crypto, the effectiveness of token buybacks has become a hot topic. Recent critiques, notably from Jupiter's co-founder Siong Ong, raise important questions about these strategies' ability to foster lasting value. This piece takes a closer look at how community-driven choices regarding capital allocation could lead protocols to invest more in enduring growth rather than relying heavily on buybacks.
Jupiter's Buyback Strategy: A Case in Point
Siong Ong didn't hold back when he questioned Jupiter's token buyback approach, igniting a crucial discussion about capital allocation and the concept of long-term tokenomics. Jupiter is said to have spent over $70 million on JUP buybacks in 2025, yet this effort yielded little in terms of price performance. Allocating as much as 50% of protocol fees to buy and lock JUP tokens, Ong remarked that the token “obviously didn’t move much.”
His critique sheds light on a significant issue: the magnitude of spending did not yield substantial market support. Currently, JUP is trading about 89% below its all-time high of $1.83. Ong's suggestion to channel the same $70 million into user acquisition, retention incentives, and ecosystem development instead of passive market support raises eyebrows.
Community Involvement: The Role of Governance in Capital Allocation
The buyback narrative extends beyond Jupiter. Other crypto founders are also reexamining their strategies. For example, Helium's CEO Amir Haleem announced the cessation of HNT buybacks to shift focus to operational expenses. This signifies a broader industry trend where community governance critically influences capital allocation strategies.
Protocols that integrate buybacks within their governance models empower community members to vote on fund allocations. This approach cultivates a sense of ownership and transparency, potentially enhancing trust and encouraging users to remain invested rather than exit swiftly.
A Shift in Tokenomics: Focusing on Ecosystem Growth
The buyback debate is unfolding in the wake of several significant tokenomics decisions by Jupiter at the dawn of 2026. The protocol recently scaled back its annual “Jupuary” airdrop from an anticipated 700 million JUP to a more modest 200 million, intending to minimize dilution and sell pressure. Moreover, the Jupiter DAO sanctioned the burning of 130 million JUP from the “Litterbox” treasury in late 2025, a strategic move to decrease circulating supply permanently.
While JUP’s price performance has been less than stellar, Jupiter's product expansion remains robust. The protocol recently launched Jup Lend, which amassed over $1.5 billion in total value locked by early January 2026. This juxtaposition of strong product adoption against weak token performance intensifies the discussion about whether financial resources should prioritize growth over market interventions.
Exploring Alternatives: Sustainable Ways to Enhance Token Value
As the crypto landscape transforms, alternative methods for boosting token value, independent of buybacks, are gaining traction. These might include enhancing utility through staking and governance, creating scarcity via token burns or vesting, and driving demand through partnerships and community engagement.
For instance, staking rewards and liquidity mining promote long-term holding, while governance participation empowers token holders, aligning incentives and fostering community ownership. Furthermore, partnerships with established platforms can expand use cases and user bases, subsequently increasing token demand.
Summary: The Path Forward for Crypto Protocols
Siong Ong’s remarks highlight a growing tension within crypto protocols: Do buybacks genuinely bolster long-term value, or is it simply better to focus on expanding real usage? The outcome of Jupiter’s community discussion could set a new standard for other DeFi projects rethinking token economics in 2026.
As the industry presses on, an emphasis on community-driven decisions and sustainable growth strategies will probably shape the future of crypto economics, ensuring that protocols remain resilient and adaptable in an ever-changing market.
