DeFi’s Capital Reallocation: Buyback Strategies Connect Token Worth to Protocol Success

Ether.fi DAO has put forward a $50 million

token repurchase plan, designed to help stabilize the token’s value and decrease circulating supply as prices hover near all-time lows, according to a . The buyback will be triggered if ETHFI falls below $3, mirroring a rising pattern in decentralized finance (DeFi) where projects tap into treasury reserves to bolster token prices. This is Ether.fi’s third buyback effort since 2024, signaling a broader industry movement toward allocating capital based on protocol revenue, as highlighted in a .

The plan proposes a flexible buyback approach that responds to market conditions, with purchases capped at $50 million or until the DAO chooses to halt the initiative. All transactions will be conducted on the open market, and on-chain activity will be transparently tracked through Dune Analytics. The strategy ensures that buybacks are only executed when prices are low, making use of funds during periods of weak demand. Representatives from the Ether.fi Foundation noted the program’s scalability, explaining that buyback limits will increase in line with protocol revenue growth, as also reported by livebitcoinnews.

Ether.fi’s decision comes as ETHFI is trading at $0.93, a drop of more than 89% from its 2024 high. Despite this sharp decline, the protocol remains financially strong, with $10 billion in total value locked (TVL) and $360 million in projected yearly fees, figures cited by livebitcoinnews. These numbers indicate that the buyback can proceed without affecting essential operations, and may help align tokenholder interests with the protocol’s performance. The move also highlights the changing nature of DeFi governance, where token utility and market forces are increasingly central to capital management strategies.

Buyback programs have accelerated in 2025, with DeFi projects committing over $1.4 billion to these initiatives.

DAO has recently authorized a $50 million yearly buyback, and OpenSea intends to allocate half of its revenue to token repurchases, as detailed in the livebitcoinnews report. This trend illustrates a wider shift in the sector toward viewing DeFi platforms as profit-generating businesses, with a focus on boosting tokenholder value and maintaining price stability. Ether.fi’s proposal stands out by directly tying buyback actions to price points, creating a responsive mechanism that adapts to market shifts, as described in the CoinMarketCap article.

Some observers caution that while buybacks may offer short-term price support, their long-term impact depends on the protocol’s underlying strength. Ether.fi’s continued growth in TVL and fee revenue will be crucial for the program’s success. Meanwhile, the DeFi industry remains alert to regulatory uncertainties, especially after recent tariff policy announcements by U.S. President Donald Trump have unsettled global markets.