The Stock Buyback Model Rising in the Encryption Field

Seven years ago, a well-known technology company achieved a financial feat whose impact even surpassed that of the company's most outstanding products. In April 2017, this company opened a new headquarters campus in Cupertino, California, which cost $5 billion; a year later, in May 2018, the company announced a $100 billion stock buyback plan—an amount that is 20 times its investment in this 360-acre campus, referred to as the “Spaceship.” This sent a core message to the world: in addition to its iconic products, it has another “product” that is equally important (or may even surpass) the former.

This was the largest stock buyback program in the world at the time and part of the company's decade-long buyback frenzy—during which it spent over $725 billion repurchasing its own shares. Exactly six years later, in May 2024, the company broke the record again by announcing an $110 billion buyback program. This move demonstrates that the company not only knows how to create scarcity in hardware devices but also understands the operations at the stock level.

Today, the encryption currency industry is adopting similar strategies, with a faster pace and larger scale.

The two major “revenue engines” in the industry - the perpetual futures exchange Hyperliquid and the meme coin issuance platform Pump.fun - are using almost every penny of their fee income to buy back their own tokens.

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Hyperliquid set a record of $106 million in transaction fee revenue in August 2025, with over 90% being used to buy back HYPE tokens on the open market. Meanwhile, Pump.fun's daily revenue briefly surpassed Hyperliquid - on a certain day in September 2025, the platform achieved a single-day revenue of $3.38 million. Where did this revenue ultimately go? The answer is that it was 100% used to buy back PUMP tokens. In fact, this buyback model has been ongoing for more than two months.

This operation gradually gives encryption tokens the attributes of “shareholder rights proxy”—which is rare in the cryptocurrency field, after all, tokens in this field are often sold off to investors at the first opportunity.

The underlying logic is that cryptocurrency projects are trying to replicate the long-standing successful path of traditional stock market “dividend aristocrats”: these companies spend huge sums to reward shareholders through stable cash dividends or stock buybacks. For example, a certain tech giant had a stock buyback amount of $104 billion in 2024, accounting for about 3%-4% of its market value at the time; whereas Hyperliquid achieved a “circulation offset ratio” of up to 9% through buybacks.

Even by the standards of traditional stock markets, such numbers are astonishing; in the field of encryption, they are unprecedented.

Hyperliquid has a very clear positioning: it has created a decentralized perpetual futures exchange that offers the smooth experience of a centralized exchange while operating entirely on-chain. The platform supports zero gas fees and high-leverage trading, and it is a Layer 1 focused on perpetual contracts. By mid-2025, its monthly trading volume has surpassed $400 billion, capturing about 70% of the DeFi perpetual contract market.

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What truly sets Hyperliquid apart is its approach to capital utilization.

The platform will allocate more than 90% of its fee revenue to the “Assistance Fund” every day, and this fund will be used directly to purchase HYPE tokens in the open market.

As of the writing of this article, the fund has accumulated over 31.61 million HYPE tokens, valued at approximately $1.4 billion—an increase of 10 times from 3 million tokens in January 2025.

This buyback frenzy reduced the circulating supply of HYPE by about 9%, pushing the token price to a peak of $60 in mid-September 2025.

At the same time, Pump.fun has reduced the circulation of PUMP tokens by approximately 7.5% through buybacks.

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This platform transforms the “Meme coin craze” into a sustainable business model with extremely low fees: anyone can issue tokens and build “bonding curves” on the platform, allowing market enthusiasm to ferment freely. This platform, which was originally just a “joke tool”, has now become a “production factory” for speculative assets.

But hidden dangers also exist.

The income of Pump.fun shows obvious periodicity - as its income is directly linked to the popularity of Meme coin issuance. In July 2025, the platform's income fell to $17.11 million, the lowest level since April 2024, and the buyback scale was also reduced; by August, the monthly income rebounded to over $41.05 million.

However, “sustainability” remains an unresolved issue. When the “Meme season” cools down (which has happened in the past and will inevitably happen in the future), the token buybacks will also shrink. More seriously, the platform is facing a lawsuit amounting to $5.5 billion, with the plaintiff accusing its business of being “similar to illegal gambling.”

The core support for Hyperliquid and Pump.fun at present is their willingness to “return profits to the community.”

A certain tech giant has returned nearly 90% of its profits to shareholders through buybacks and dividends in some years, but these decisions are mostly periodic “bulk announcements”; whereas Hyperliquid and Pump.fun continuously return almost 100% of their revenue to token holders every day—this model is sustainable.

Of course, there are still essential differences between the two: cash dividends are “immediate earnings” and, although they are subject to tax, they have strong stability; whereas buybacks are at most just a “price support tool”—once income declines or the unlocked amount of tokens far exceeds the buyback amount, the effect of the buyback will become ineffective. Hyperliquid is facing an impending “unlock impact,” while Pump.fun needs to deal with the risk of “Meme coin popularity shift.” Compared to a certain well-known company's record of “63 years of continuous dividend increases” or a certain tech giant's long-term stable buyback strategy, the operations of these two crypto platforms resemble “walking a tightrope at a high altitude.”

But perhaps, this is already difficult in the encryption industry.

Cryptocurrency is still in the stage of development and maturity, and has not yet formed a stable business model, but it has already shown an astonishing “growth rate”. The buyback strategy just happens to have the elements that drive the industry to accelerate: flexibility, tax efficiency, and deflationary attributes—these characteristics are highly compatible with the “speculation-driven” crypto market. So far, this strategy has transformed two projects with completely different positioning into top “income machines” in the industry.

Whether this model can be sustained in the long term is still uncertain. However, it is evident that it has, for the first time, freed encryption tokens from the label of “gambling chips,” bringing them closer to “company stocks that can create returns for holders”—the speed of its returns may even put pressure on traditional tech giants.

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I believe there is a deeper insight behind this: a certain tech giant realized before the emergence of encryption currency that it was selling not only hardware products but also its own shares. Since 2012, the company has spent nearly $1 trillion on share buybacks (more than the GDP of most countries), reducing the circulation of its stock by over 40%.

The company's market value still remains above $3.8 trillion, partly because it views its stock as a “product that needs marketing, polishing, and maintaining scarcity.” The company does not need to raise funds through issuing new shares—its balance sheet is cash-rich, so the stock itself has become a “product,” and shareholders have become “customers.”

This logic is gradually permeating the cryptocurrency field.

The success of Hyperliquid and Pump.fun lies in the fact that they do not reinvest or hoard the cash generated from their business, but instead convert it into “purchasing power that boosts demand for their own tokens.”

This has also changed investors' perception of encryption assets.

The sales of a certain tech giant's hardware products are certainly important, but investors who are optimistic about the company know that its stock has another “engine”: scarcity. Nowadays, for HYPE and PUMP tokens, traders are also beginning to form a similar understanding — these assets in their eyes come with a clear commitment: every consumption or transaction based on the token has over a 95% probability of being converted into “market buyback and burn”.

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However, the case of a certain technology giant also reveals another aspect: the strength of buybacks always depends on the intensity of the cash flow behind it. What happens when revenue declines? When the sales of the company's main products slow down, its strong balance sheet allows it to fulfill buyback commitments through bond issuance; whereas Hyperliquid and Pump.fun do not have such a “buffer” - once trading volume shrinks, buybacks will also come to a halt. More importantly, traditional tech companies can turn to dividends, service businesses, or new products to cope with crises, whereas these encryption protocols currently have no “backup plan.”

For cryptocurrencies, there is also the risk of “token dilution.”

A certain tech giant does not need to worry about “200 million new shares flooding the market overnight”, but Hyperliquid faces this issue: starting from November 2025, HYPE tokens worth nearly $12 billion will be unlocked for insiders, a scale far exceeding the daily repurchase volume.

Traditional companies can independently control the circulation of their stocks, while encryption protocols are constrained by token unlocking schedules that were “written in black and white” many years ago.

Even so, investors still see value in it and are eager to participate. The strategy of a certain tech giant is obvious, especially for those familiar with its decades-long development history — the company has cultivated shareholder loyalty by transforming its stocks into “financial products.” Today, Hyperliquid and Pump.fun are trying to replicate this path in the encryption field, only at a faster pace, with greater momentum, and higher risks.

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