DeFi Borrows Corporate Tactics: $1.4B Buybacks Aim to Stabilize Token Prices

The Ether.fi (ETHFI) community has approved a $50 million token buyback program, marking the latest move in a broader trend of decentralized finance (DeFi) protocols using repurchase strategies to stabilize prices and boost investor confidence. The proposal, which received unanimous support in a four-day Snapshot vote, will activate once the ETHFI price drops below $3, with transactions transparently recorded on-chain, according to LiveBitcoinNews. This initiative aligns Ether.fi with a growing cohort of DeFi projects, including Uniswap and Aave, which have collectively allocated over $1.4 billion to buybacks in 2025, according to CoinGecko.

Strategic Buyback Framework

The Ether.fi DAO proposal outlines a dynamic buyback model tied to market conditions rather than fixed schedules. The program authorizes the Ether.fi Foundation to repurchase ETHFI tokens using treasury reserves when the price is below $3, with a total cap of $50 million. This approach aims to reduce circulating supply, enhance liquidity, and create a price floor during periods of weak demand. The foundation plans to scale buyback capacity in proportion to protocol revenues, ensuring surplus funds are reinvested to strengthen market stability.

The initiative builds on prior successful buyback efforts under Proposals 8 and 10, which improved ETHFI's liquidity and price resilience, according to The Block. Current ETHFI trading activity supports the program's relevance: as of October 31, the token traded at $0.93, down 89% from its 2024 peak. This price level places it firmly within the buyback range, with the protocol's $10 billion total value locked and $360 million in annualized fees providing ample financial flexibility.

Broader DeFi Buyback Trend

Ether.fi's move reflects a sector-wide shift toward treating protocols as revenue-generating businesses. Aave DAO, for instance, recently proposed a $50 million annual buyback program funded by protocol fees, while NFT platform OpenSea plans to allocate 50% of revenue to token repurchases. The strategy mirrors traditional corporate finance practices, where buybacks signal financial health and align protocol success with tokenholder value.

CoinGecko's analysis highlights the accelerating trend, noting that DeFi buybacks have surged to $1.4 billion in 2025, driven by protocols seeking to counteract secondary-market volatility. Projects like Hyperliquid and Pump.fun have also joined the wave, with the latter repurchasing $19.6 million worth of PUMP tokens. This collective effort underscores a maturing DeFi ecosystem prioritizing long-term value creation over speculative cycles.

Governance and Execution

The buyback program requires no further governance action once the price threshold is met, with purchases executed automatically via open markets or designated on-chain venues. All transactions will be publicly accessible through Ether.fi's Dune Analytics dashboard, reinforcing transparency. Critics, however, have raised concerns about execution risks, including potential market manipulation and the sustainability of funding as the protocol scales.

The Ether.fi Foundation emphasized its commitment to expanding buyback capacity as revenues grow, provided ETHFI remains below $3. This adaptive framework aims to balance immediate market support with long-term fiscal responsibility, a critical consideration for protocols navigating the volatile crypto landscape.

Outlook

With ETHFI currently trading in a descending channel and near-term support at $1.05, analysts suggest a breakout above this level could drive the token toward $1.26, aligning with key technical indicators. The buyback program, coupled with Ether.fi's robust revenue base, may catalyze renewed investor interest, particularly if broader DeFi market conditions stabilize.

As DeFi protocols continue to refine capital allocation strategies, Ether.fi's $50 million buyback initiative serves as a case study in leveraging treasury resources to align protocol performance with tokenholder incentives-a model likely to influence future governance decisions across the sector.

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