The limitations of traditional token buyback strategies have been laid bare as Jupiter Exchange (JUP) grapples with the aftermath of a $70 million repurchase program that failed to stem a significant price decline.
The $70 Million Lesson
In a candid admission that has rippled through the Solana ecosystem, Jupiter co-founder Siong Ong revealed that the protocol spent over $70 million on JUP buybacks throughout 2025. Despite this massive capital injection, the token's price action remained bearish, overwhelmed by structural selling pressure and aggressive token unlocks.
The Unlock Imbalance
While $70 million was deployed for support, research indicates Jupiter faces approximately $1.2 billion in upcoming token unlocks. The buyback program covered only about 6% of this supply, rendering it ineffective against the deluge.
Siong has proposed a radical shift in strategy. Rather than providing exit liquidity for sellers via buybacks, he suggests redirecting the capital toward growth incentives. The proposal aims to subsidize new and existing users, effectively paying for ecosystem activity rather than token price support.
We spent more than $70 million on buybacks last year, and the price obviously didn’t move much.
Overwhelmed by Supply Dynamics
The math behind the failed strategy paints a stark picture of the supply-demand imbalance. With monthly unlocks of 53 million JUP scheduled to continue through June 2026, the circulating supply has ballooned by roughly 150% since the token's launch. Even with 100 million tokens locked for three years, the market has struggled to absorb the consistent inflation.
Solana Co-Founder Weighs In
Solana co-founder Anatoly Yakovenko entered the fray with a theoretical framework that could offer a solution for high-emission protocols like Jupiter. Yakovenko argued against the "burn" or "buyback" reflex, suggesting instead that protocols should focus on capital formation and long-term alignment.
A New Model for Yield
“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,” Yakovenko suggested. His model proposes a shift toward staking-based yields backed by a growing balance sheet, incentivizing holding rather than selling into buyback liquidity.
Industry-Wide Pivot
Jupiter is not alone in this realization. The debate mirrors recent moves by Helium (HNT), another major Solana ecosystem player. Helium recently suspended its repurchase program after concluding that the market was unresponsive to the buybacks, redirecting funds toward expanding its mobile subscriber base and hotspot network.
For Jupiter, the decision represents a critical juncture. Balancing short-term price stability with long-term ecosystem viability is the central challenge of the 2026 crypto landscape. If Siong’s proposal passes, it could set a precedent for how DeFi protocols manage their treasuries in the face of massive token unlocks.