Blockworks Consulting Head: Protocols Should Prioritize Using Revenue for Growth Over Token Buybacks

Odaily News David: David, Head of Consulting at Blockworks, posted on the X platform stating that he, his team, and the Blockworks Advisory team have written articles about token buybacks multiple times in the past. He pointed out that his team was the sole dissenting voice in the Aave token economic model proposal, holds a similar view on the Jit token economic model, and consistently believes that allocating capital or revenue to growth—such as vertical or horizontal expansion, customer acquisition, etc.—is the correct path for many, if not all, protocols.

He emphasized that currently, no protocol is immune to competition, regardless of its dominance or free cash flow generation capabilities, including Hyperliquid. Finally, referencing his article on the Aave tokenomics model, he stated that in a fiercely competitive and dynamic industry, merely maintaining current regional dominance is insufficient to ensure sustained future leadership. The risk of using revenue indiscriminately for token buybacks is primarily twofold: first, it suggests the protocol faces no competitive pressure; second, it implicitly acknowledges that the revenue cannot be used elsewhere to solidify a long-term moat. David believes the entire industry remains minuscule in scale, and protocol teams need to think with a much longer-term perspective.