Token Buyback

Definition ∞ A token buyback is a corporate action where a project or company repurchases its own native cryptocurrency tokens from the open market. This process typically reduces the total supply of tokens, which can potentially increase the value of the remaining tokens. Projects often conduct buybacks using a portion of their revenue or treasury funds. The primary goal is to return value to token holders and demonstrate confidence in the project’s future.
Context ∞ Crypto news frequently reports on token buybacks as a mechanism for value accrual and price support within decentralized finance (DeFi) and Web3 projects. Debates often concern the transparency of buyback programs and their actual impact on token economics and decentralization. A critical future development involves more sophisticated and transparent on-chain buyback mechanisms, potentially integrated with decentralized autonomous organization (DAO) governance.