GlossaryIntermediate
Buyback and Burn
A protocol using its own revenue to purchase and destroy its token from the open market.
Buyback and burn refers to a protocol using its own revenue to purchase its token on the open market and then permanently destroy (burn) it, reducing circulating supply.
This is one specific mechanism some protocols use to return value to token holders, distinct from directly distributing revenue as a dividend-like payment.
Examples
- A protocol might commit a percentage of its revenue to a recurring buyback-and-burn program.
- Buyback and burn reduces supply rather than directly distributing revenue to holders.