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If you're not a speculative crypto investor, then maybe you're a fundamental investor who probably likes token buyback programs. Maybe your curiosity was piqued by Jupiter's recent buyback announcement with 50% of protocol revenues. But how much do these value accretive tools really matter? |
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The fall of AI tokens: |
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The AI crypto sector is experiencing a sharp downturn, as illustrated in the chart representing the last 24 hours, with "AI agents" (far right) leading losses. |
The decline follows the rising public profile of DeepSeek, a new open-source AI model developed in China, which is drawing global attention and challenging incumbents. This prospective shift in mindshare, coupled with a broader selloff in US tech equities has triggered a significant correction in AI-focused crypto tokens. |
Traders had positioned AI tokens as a high-beta play on the broader AI boom, but the Nasdaq dump has flipped sentiment sharply. The news caused a stark bifurcation in sentiment around AI tokens. On the one hand, cost-efficient AI models should be a boon for the technology's adoption. But the market reaction also showcases the speculative excess and a lack of underlying revenue in AI projects. |
Unlike equities, AI tokens lack direct exposure to model breakthroughs — they tend to follow, not lead, the technology — leaving them vulnerable when market sentiment reverses. |
This sharp reversal underscores AI crypto's dependence on hype-driven cycles rather than fundamental adoption. For the sector to recover, projects will need to demonstrate sustainable value beyond short-lived narrative-driven pumps. |
— Macauley Peterson |
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📅 June 24–26 | Brooklyn, NY |
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Does token value accrual matter? |
When crypto projects make big announcements using words like "buyback," "burn," or "revenue sharing," that's usually taken to mean there are bullish investing tailwinds at play. |
But I have questions. How much does an annualized 10% buyback yield actually matter when these tokens can plummet 20% in a day? |
Does value accrual matter because it is valuable for reasons of fundamental analysis (i.e. cash flows), or merely for narrative optics? |
Over the weekend, Solana DEX aggregator Jupiter announced a significant JUP buyback program with 50% of fee revenues. |
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Based on estimates by Blockworks Research analyst Carlos Gonzalez, that translates to about $750 million in annualized JUP buybacks, or about a significant 40% of JUP's circulating supply in a year. |
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That's a pretty impressive annualized buyback yield of about 42%. |
But what does 42% matter when token prices can tank 90% in a week? |
Well, it's not a flash in the pan solution, but it helps to sustain against selling pressure. Carlos pointed to Raydium's successful experiment with buybacks:
"Raydium has accumulated 20% of RAY's supply since the start of their buyback program. In terms of market structure, it adds buying pressure to the token and RAY has outperformed most of Solana DeFi. Fundamentals matter but of course you could also find examples to argue that buybacks aren't that bullish. For instance, Maker." |
Virtuals, the leading AI agent launchpad on Base (now expanding to Solana), also committed two weeks ago to an estimated $40 million in buybacks and burns for 10k+ agent tokens over a 30-day TWAP. |
Since the buybacks were announced on Jan. 15, the five largest agent token buybacks by far are GAME, CONVO, AIXBT, SEKOIA and MISATO, all of which have given up all their gains as of yesterday's market crash. |
Over the last year, many blue-chip DeFi protocols with actual product-market fit have also sought to return revenues to token holders. |
Compound, for instance, proposed in August a fee switch to allocate 30% of its reserves to COMP stakers. |
Marc Zeller of Aave proposed last July a "Buy & Distribute" proposal to buy back AAVE on the open market with "net excess revenue of the protocol." |
Then there's Uniswap, which planned to implement a UNI fee switch for stakers, but quickly abandoned the proposal after receiving an SEC Wells notice two months later (Uniswap is again attempting some form of value accrual on its upcoming Unichain). |
Major L2s like Arbitrum, Starknet and Gnosis have floated proposals last year to return value to token holders who stake their tokens. |
Starknet voted last September to enable Starknet staking (12.94% APY) and Gnosis passed a proposal in June to spend $30 million of the DAO's treasury to buy back liquid GNO over a six-month period. |
As far as I can tell, out of all the above-mentioned value accrual proposals, only Starknet and Gnosis have actually implemented their value accretive mechanisms. |
Yet from the time these value accrual mechanisms were put in place, GNO has seen a 46% decline, while STRK has stayed flat. |
So what are the right mental models to think about value accrual mechanisms? They're not a magic bullet. But they're a key ingredient in the recipe of getting a successful token launch right. |
— Donovan Choy |
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3 things you can do on Eclipse |
Eclipse is a chain blending Ethereum's security with Solana's speed. Eclipse provides an official bridge to facilitate seamless asset transfers between Ethereum and Eclipse. |
Here are 3 things you can do to earn yield and "Eclipse Grass" which may be an eligibility criterion for future tokens: |
Leverage Stride's Liquid Staking: Stride has a bridge between Celestia and Eclipse, enabling liquid staked TIA for users. This means you can stake your assets — such as TIA — and still maintain liquidity, allowing you to earn the staking yield plus "grow grass" or engage in other DeFi activities. Mint USDN with Neptune Protocol: Neptune Protocol has launched on Eclipse, introducing USDN as the native decentralized stablecoin. Similar to Liquity, by depositing collateral, you can mint USDN and use it to participate in the Eclipse ecosystem. Add Liquidity Pairs on Orca or Solar DEX – Liquidity and volume are scarce today, but LPing will earn some trading fees and potential rewards.
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While there is always plenty of competition for our attention and capital, there's also a reliable maxim in crypto: It often pays to be early. |
— Macauley Peterson |
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 | timbeiko.eth @TimBeiko |  |
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What are the best counter arguments to this piece? |  Georgios Konstantopoulos @gakonst
ETHEREUM ACCELERATION . With @matthuang, @danrobinson & @_charlienoyes. |
| | | 5:45 PM • Jan 26, 2025 | | | | | | 201 Likes 21 Retweets | 47 Replies |
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 | ZoomerAnon @ZoomerAnon | |
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We're going to recreate yield aggregators (one of the worst project genres ever in crypto when measured by the ratio of peak initial hype to long term market cap) but call it AI and make it centralized and more opaque and less efficient |  Avi @AviFelman
Am I hallucinating or is it 2021 again x.com/bridge__harris… |
| | | 2:36 AM • Jan 25, 2025 | | | | | | 36 Likes 2 Retweets | 1 Reply |
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 | arixon.eth @arixoneth | |
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for those unaware, the chads at lambda discovered a massive bug in SP1 that let them prove literally anything this is why i always stress the importance of multi proofs for rollups. without them, a single bug could mean total loss of funds |  Fede's intern 🥊 @fede_intern
blogpost: blog.lambdaclass.com/responsible-di… |
| | | 10:13 PM • Jan 26, 2025 | | | | | | 55 Likes 4 Retweets | 4 Replies |
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 | 𝕯𝖆𝖓𝖌𝖊𝖗 @safetyth1rd | |
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so our crypto coins are going down bc a bunch of Chinese quants invented a more efficient ai model on last gen GPUs, giving Silicon Valley an existential crisis | | | 7:56 AM • Jan 27, 2025 | | | | | | 36 Likes 1 Retweet | 11 Replies |
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