Subtitle: From Uniswap to BNB, crypto projects are moving towards a 'shareholder' governance era - but the logic of value capture is far more complex than it appears.
1. Introduction: The Awakening of Token Market Value Management
When Uniswap announced the launch of the 'buyback and burn' mechanism on November 11, the attention of the crypto world once again focused on a familiar yet tricky question: how can tokens achieve value capture?
This traditional financial capital operation method - buybacks, cancellations, and dividends - has now been rapidly 'transplanted' into the blockchain world. The difference is that in this open system, every token holder becomes a potential 'shareholder', and the token economic model becomes the project's 'corporate governance'.
As DeFi, CeFi, GameFi, and other fields introduce buyback, destruction, and dividend mechanisms, market value management has become the focus of a new narrative. The question is: which method truly benefits token holders?
II. Buybacks: Signals, Discipline, and the Boundaries of the Treasury
By 2025, 28 token projects had cumulative buyback amounts exceeding $1.4 billion, with the top ten projects accounting for 92% of the scale. Behind the buyback frenzy is the collective test of 'financial maturity' for crypto protocols.
In traditional markets, Apple's buyback scale over the past decade has reached $704 billion, becoming an important tool for shareholder returns. However, in the crypto field, the effectiveness of buybacks is not consistent.
Hyperliquid has stable trading income, and its buybacks can effectively support prices;
Pump.fun, on the other hand, relies more on market heat, and buybacks can only bring about temporary price fluctuations.
Buybacks can indeed convey confidence, but if the source is the treasury rather than recurring income, it resembles a 'temporary financial trick show'. As Keyrock's research director Amir Hajian stated: 'A truly mature protocol should link buybacks to valuation metrics and cash flow strength, rather than blindly chasing prices.'
Therefore, 'trigger-based buybacks' (such as the models Fluid and Lido are exploring) have become a new trend—only triggering buybacks when income exceeds a specific threshold to protect the treasury and ensure sustainability.
In other words, **the core of buybacks is not the scale of expenditure, but the execution of discipline.** It represents the protocol's judgment of 'its own value being underestimated', not manipulation of price.
III. Destruction: Deflation Narrative and Scarcity Illusion
If buybacks are 'capital discipline', then destruction (Burn) is 'emotional alchemy'.
From BNB's 33 quarterly destructions to MakerDAO's periodic buyback cancellations, 'deflation' has become an important narrative to maintain market faith. BNB has cumulatively reduced about 31% of the total token supply through destruction, with declines in bear markets significantly lower than Bitcoin. This has led to destruction being widely seen as 'real buyback'—not only reducing circulation but also strengthening expectations of scarcity.
But the problem is: scarcity does not equal value.
Destruction can indeed boost price expectations, but it also means resource redistribution, which may weaken ecological construction, R&D, and incentive investments. Worse, some projects engage in 'fake destruction' or 'circular destruction' operations. For example, Crypto.com once claimed to destroy 70 billion CRO, but later reissued the same amount of tokens.
The destruction mechanism acts like pouring oil on fire in a bull market, but loses its magic in a bear market. It is more like a marketing behavior, maintaining faith with scarce narratives rather than building long-term returns.
Destruction is a form of 'decentralized brand marketing'—it creates trust through digital disappearance but cannot replace real growth.
IV. Dividends: The Cash Flow Revolution in the Crypto World
Compared to the indirect value capture of buybacks and destruction, the dividend mechanism allows token holders to experience 'cash flow sensation' for the first time.
In the DeFi space, dividends are typically realized through staking, liquidity mining, and fee sharing, etc. For example, in 2025, the dividend spending of leading DeFi protocols increased by 400%, becoming an important tool for driving user retention and lock-up.
This mechanism makes tokens no longer just speculative products, but 'yield assets'. The rewards obtained by stakers essentially come from the actual use of the protocol: transaction fees, lending interest, or validation rewards.
But the emergence of dividends also gives tokens more 'debt attributes'. In the eyes of regulators, this 'income distribution' may be equivalent to the issuance of securities. Uniswap has not yet officially activated its fee switch due to regulatory uncertainties.
Moreover, while dividends bring passive income, they also introduce new risks:
Smart contract vulnerabilities may lead to fund losses;
Liquidity mining faces impermanent loss;
The lock-up mechanism sacrifices liquidity and opportunity cost.
However, the essential meaning of this mechanism lies in: it allows DeFi to possess cash flow logic.
In traditional finance, dividends are dividends; on-chain, dividends are the starting point of 'protocol bondification'. Protocols are no longer just growth stories, but turn into a 'decentralized fund' capable of continuously distributing returns.
V. The Future of Hybrid Strategies: Balancing Value and Liquidity
In reality, more and more projects are trying to integrate these three methods.
MakerDAO and Lido will pair buyback tokens with ETH or stablecoins to form liquidity pools, increasing liquidity while reducing supply;
Some protocols adopt a buyback + destruction parallel mechanism to maintain price support and deflation expectations;
Emerging projects introduce automated dividend systems, allowing returns to be automatically distributed according to block cycles.
In the future, the token economic model may evolve towards 'self-evolution':
Buybacks are responsible for value injection,
destruction reinforces the narrative of scarcity,
dividends provide sustainable cash flow.
With the combination of these three, tokens will no longer be just governance certificates, but 'yield-bearing governance assets'—integrating growth potential, voting rights, and profit rights.
Emerging models such as veToken and Auto-Buyback + Rebase mechanisms are also exploring smarter distribution methods, allowing token values to automatically follow protocol performance changes.
VI. Conclusion: From 'Price Game' to 'Value Consensus'
In the world of token economics, the differences between buybacks, destruction, and dividends are no longer just technical choices, but divisions of values.
Buybacks represent rationality and discipline;
Destruction represents faith and emotion;
Dividends represent reality and returns.
The real challenge lies not in whose mechanism is more aggressive, but in whether a sustainable value cycle can be built: income-driven, mechanism transparent, and signals credible.
For token holders, the future judgment logic will also change—
you will no longer just 'watch price fluctuations',
but instead bet on one question:
which token model can survive longer?
