Yes, buybacks work. But only under specific conditions.
The key distinction isn't whether a protocol buys back its token, it's whether the system can afford to before those buybacks occur.
Sky Protocol is a case study.
$96.8M in SKY buybacks in 2025, with 1.55B tokens removed from circulation. That's a 261x increase from 2024.
But here's why it worked:
Sky Protocol generated $338M in Gross Protocol Revenue in 2025, while Operational Expenses fell 63% YoY to $8.8M in Q4.
Revenue exceeded operating costs. Buybacks were funded by realized activity, not future growth assumptions.
Buybacks aren't inherently good or bad. Their impact depends on timing and structure.
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