Token Buyback
When a protocol uses revenue to purchase its own token from the open market, reducing circulating supply.
In-Depth Explanation
Buybacks return value to tokenholders by creating buy pressure and reducing supply. Unlike dividends, buybacks are tax-efficient in many jurisdictions and don't require active claiming. However, buybacks may benefit sellers more than long-term holders if tokens are immediately sold.
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Related Terms
Dividend
Direct distribution of protocol revenue to tokenholders, typically in ETH, stablecoins, or the protocol's native token.
Tokenholder Revenue
The portion of protocol revenue that actually flows to token holders through buybacks, dividends, or burns.
Protocol Revenue
Fees collected by a protocol that accrue to the protocol itself or its tokenholders, rather than to liquidity providers or other participants.
More in Tokenomics
View all →Emissions
New tokens distributed by a protocol as incentives, typically to liquidity providers or users.
Liquidity Mining
Earning token rewards by providing liquidity to a DeFi protocol.
Dividend
Direct distribution of protocol revenue to tokenholders, typically in ETH, stablecoins, or the protocol's native token.
Vesting
A schedule that gradually releases tokens to recipients over time, preventing immediate selling.