Aave Labs Team Member: Token Buybacks Do Not Create Value in Themselves, Should Be Viewed as Supplementary Measures Rather Than Plans

Odaily News: Kolten, a team member at Aave Labs, posted on the X platform stating that crypto projects or DAOs should conduct buybacks when they have excess cash and believe the asset price is low. The strategy of tech giant Apple is to prioritize investing in its own business, and only conduct buybacks when surplus cash is ample and it considers its stock to be the best investment choice, with the core being business competitive advantage. This principle applies to any asset; the primary drivers of price are adoption rate, market dominance, and an attractive narrative.

Buybacks can release confidence signals and reduce token circulation, but they do not create value in themselves and should be used as a supplementary measure rather than the plan itself.

For tokens, when the market's new supply exceeds the buyback volume, the effect of buybacks is further diminished. Many crypto companies overly focus on crypto-native buyers, ignoring that 95% of potential investors do not pay attention to tokenomics. Most buyers have never heard of Crypto Twitter; they value product features and easy-to-understand stories more.

Furthermore, most crypto assets currently still exhibit correlated trading characteristics. Until projects can attract users and capital that are not dependent on the overall crypto market, it is difficult to achieve independent valuation, and buybacks are also unlikely to have a significant impact.