Why Jupiter's $70M Buyback Failed to Support JUP Price

Source: Cryptonews Original Title: Solana co-founder weighs in on why Jupiter’s $70M buyback failed to boost JUP price Original Link:

Token Buyback Limitations in High-Emission Models

Jupiter’s buyback initiative has reignited a fundamental debate in crypto: can repurchases effectively support token prices when supply growth remains aggressive?

The Buyback-Unlock Mismatch

Using approximately half of protocol fee revenue, Jupiter allocated over $70 million in 2025 for JUP repurchases. Despite this substantial investment and Jupiter’s position as one of Solana’s most active decentralized finance platforms, the token’s price performance told a different story.

By early January 2026, JUP traded near $0.20–$0.22, representing an 89% decline from its peak. The culprit was not lack of platform activity, but rather the relentless pace of token supply expansion.

Since launch, JUP’s circulating supply has surged approximately 150%, while the buyback program has offset only a fraction of newly unlocked tokens. Through June 2026, roughly 53 million JUP tokens are scheduled to unlock monthly, creating consistent selling pressure regardless of protocol performance.

Jupiter co-founder Siong Ong publicly questioned the buyback’s efficiency in early January, noting that $70 million spent on repurchases failed to move the price meaningfully. He proposed redirecting capital toward growth incentives instead.

Why Short-Term Buybacks Fall Short

Solana co-founder Anatoly Yakovenko framed the issue more broadly: in markets with heavy token emissions, immediate buybacks fail to reset how sellers price risk. Tokens unlocked today are priced against current spot demand, not future valuations implied by ongoing repurchases.

Yakovenko’s alternative strategy emphasizes timing. Rather than purchasing immediately, protocols could accumulate profits and deploy them strategically later, or implement staking programs with extended lockup periods. This approach forces token unlocks to be valued against a future, post-buyback environment rather than spot market conditions.

This longer-term perspective also encourages token holders to think in extended cycles, similar to traditional finance balance sheet management.

Market Response and Lessons

The Jupiter community remains divided on the buyback question. Some view repurchases as essential for discipline and protocol alignment, while others acknowledge their diminished impact against aggressive supply expansion.

Jupiter has already adjusted course, reducing its planned 2026 airdrop allocation from 700 million to 200 million JUP tokens. The broader lesson is clear: in token models where scheduled unlocks dominate, buybacks alone rarely alter the fundamental outcome. Long-term capital strategies and emission management may prove more effective than short-term repurchase programs.