🥛 Why protocols shouldn’t do buybacks 🚫

GM. This is Milk Road PRO, coming at you smoother than your best pickup line after two drinks.

Today, we’re diving into a hot topic in crypto: Buybacks.

The industry loves them. Every time a protocol announces one, the token price usually shoots up.

Why does that happen? It’s simple. Buybacks create steady demand for the token, which often pushes the price higher.

So the logic goes: More buybacks, higher price.

Right? Not so fast.

Lately, there’s been a lot of chatter on Crypto Twitter about whether buybacks actually work, how big they should be, and what kind of impact they really have.

It all kicked off with a tweet from Amir, the founder of Helium, a successful DePIN project.

Source: @amirhaleem

In the tweet, he shared his take on Helium’s buybacks, how they have or rather haven’t affected the HNT price, and what they plan to do moving forward.

According to Amir, the buybacks didn’t do much. The token HNT is still down 80% in 2025.

👉 So they’re stopping them, calling it a waste of money.

That hit a nerve. It didn’t take long before others followed suit. This is a tweet from the co-founder of Jupiter, a well-known and successful super-app built on Solana.

Source: @sssionggg

He’s basically saying the same thing.

Many projects have seen their tokens drop hard over the past year, and it seems buybacks haven’t made much of a difference, or at least that’s how some founders are starting to see it.

So we figured now’s a great time to take a closer look at buybacks. Here are a few questions we want to dig into:

• Should protocols even be doing buybacks in the first place?
• How much is too much to spend on them?
• Do traditional startups actually do buybacks, or is this just a crypto thing?
• What are some real examples of buybacks done well and others that totally missed the mark?
• And finally, should you invest in protocols doing buybacks??

There’s a lot of confusion around buybacks. We think many teams are getting it wrong and it’s time to clear things up.

Let’s dive in.

PROBLEM OF CRYPTO

Before we get into buybacks, we need to step back and look at a bigger issue crypto is facing today: tokens.

Simply because there’s a clear disconnect between how well a protocol performs and what actually happens to its token price.

👉 And that gap is a big reason why new capital is still sitting on the sidelines.

In traditional markets, things are simple.

If you hold a stock, you own part of the company. It’s backed by law. Own 1% of Apple shares, and you legally own 1% of the Apple company.

But in crypto? Holding 1% of a token doesn’t mean much. Or at least, it depends.

We explored this in more detail in a previous report where we compared tokens to traditional equities. If you haven’t read it yet, it’s worth checking out.

To sum it up quickly: holding 1% of a token usually gives you some voting power, but no real claim to profits or assets. There are no guarantees or legal protections.

And that’s just one problem.

We think there’s one more, maybe even more urgent.

There just aren’t any net new buyers coming in and buying these tokens.

Most of the capital in crypto today has been here for years.

It keeps jumping from one trend to the next, chasing whatever the current narrative is.

👉 But the real issue is that the industry as a whole struggles to bring in fresh capital. That’s a big problem, and it’s holding everything back.

You might wonder why that’s happening. The answer is simple. Most protocols put zero effort into attracting new investors.

Getting a full picture of any project takes real work.

You need to know your way around crypto, where to find the right data, and how to make sense of it all. And trust me, I know how painful that is as I go through it every single week. 😄

In the traditional world, you’ve got sell-side analysts who cover specific stocks and share their reports with banks, hedge funds, family offices, and high-net-worth individuals.

Then there are quarterly earnings reports, complete with audited balance sheets, profit and loss statements, team commentary, and guidance on what’s coming next.

In crypto? None of that exists.

So the big question is, why would any new capital show up when protocols aren’t giving investors any real reason to pay attention?

We really hope that changes.

Because if it does, it could help move the entire industry forward in a big way.

So, how have protocols tried to fix this?

By doing buybacks.

Instead of solving the problem of weak external demand, we’re just going to use some of our revenue for buybacks.

Doesn’t matter if we’re actually profitable.

If the token is already overpriced.

Or if there are other ways we could spend that money to grow the business or make our position stronger.

That’s the mindset we see too often and it’s not helping.

So the real question is: Should protocols be doing buybacks in the first place?

The answer is black and white, so let’s break it down.

A good starting point is to look at what more traditional companies do with their profits. That can give us a clearer lens for thinking about what might make sense in crypto too.

ARE TRADITIONAL COMPANIES DOING BUYBACKS?

Before we dive in, there's one thing we need to clear up.

When we talk about companies like Apple or Amazon, we’re looking at giants.

These are mature businesses worth trillions of dollars, operating at a completely different stage of their life cycle compared to most crypto startups.

So while the comparison is useful, it’s not apples to apples. But we’ll come back to that part a bit later.

Here’s a table that shows how many years it took for these big companies to start rewarding their investors, either through buybacks or dividends:

Source: Milk Road

We focused on the Mag7 companies because they’re global favorites and the biggest, most followed names in tech.

✍️ They didn’t begin distributing profits through buybacks or dividends until 23 years after they were founded, and by then, their valuations were around $425B.

We’re using median values here, but the overall message is quite clear.

But perhaps it makes more sense to look at the startup world instead.

After all, every crypto project is basically a startup too.

So how does it usually work in the traditional startup space?

ARE NON-CRYPTO STARTUPS DOING BUYBACKS?

Now we’re finally comparing apples to apples.

But here’s the catch: most traditional startups don’t share any profits with their investors at all, so there isn’t much to compare in the first place.

Why is that? It’s simple.

Startup investors know what they’re signing up for.

👉 They understand that the focus is all on growth, often for many years, until the company reaches a point where it can’t find better ways to use its capital. Only then does it make sense to start distributing profits.

And that’s one of the core problems in crypto:

• A lot of participants aren’t sophisticated or experienced enough to understand what it means to invest in early-stage startups.
• Many are chasing quick gains instead of focusing on long-term business growth.
• It means your cap table ends up filled with the wrong kind of investors and that creates unhealthy pressure to deliver short-term results.

For any early-stage project, that’s a tough spot to be in and hard to manage, but that’s the fact.

That said, things are improving.

So now let’s move from theory to practice and take a look at some real examples.

The reason we’re bringing all this up is simple. We want you to think critically about buybacks and whether your favorite protocol should actually be doing them.

It’s easy to feel good when a project announces buybacks, but take a step back.

That money could maybe be used in a smarter way. And once you look at it from that angle, you might see things differently.

Uh, Oh… 😧 The rest of this report is exclusive to Crypto PRO or PRO All Access members!

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WHAT’S LEFT INSIDE? 👀

• 4 real examples of crypto projects doing buybacks, plus our take on each.
• Why we disagree with the founders of Helium and Jupiter.
• What crypto protocols should actually do with their excess capital.
• What types of projects are most likely to succeed in the long run.

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