GMX Defies Gravity: Token Soars After DAO Admits Two Years of Failed Buybacks

Sometimes, the market just laughs at your best-laid plans. GMX, the decentralized perpetual trading protocol, is staging a surprise rally—right after its own governing body spilled the beans on a multi-year buyback program that did precisely nothing for the token price.

The Buyback Blues

For two years, the protocol's treasury dutifully funneled fees into a buy-and-burn mechanism. The classic crypto playbook: reduce supply, create scarcity, watch price climb. Except the price didn't climb. The DAO's recent admission turned that strategy from a quiet hope into a public post-mortem, a rare moment of on-chain transparency that usually sends tokens tumbling.

Rally Against Reason

Instead of a sell-off, GMX ripped higher. The move flips the script, suggesting traders are betting on a new chapter—one less reliant on financial engineering that would make a traditional CFO blush and more focused on real utility and protocol growth. It's a vote of confidence in the underlying product, not its accounting tricks.

A New Narrative Takes Hold

The rally signals a market increasingly savvy to the difference between tokenomics theater and genuine value accrual. When a failed buyback becomes a bullish catalyst, it means investors are looking past the spreadsheet and at the network's fundamentals—its liquidity, its user base, its fee generation. Sometimes, admitting what doesn't work clears the deck for what actually might.

In the end, GMX's surge is a delicious irony: a token pumping on the news its own price-support program was a dud. It's a reminder that in crypto, logic is often the first casualty, and the market's verdict can be as unpredictable as a meme coin's tweet. Maybe the real buyback was the friends we made along the way.

What is the GMX DAO actually changing?

The new plan by the GMX DAO will consolidate liquidity by withdrawing approximately 600,000 GMX tokens from treasury-controlled positions on Uniswap and Trader Joe, and then redeploying them into GMX’s own liquidity pools and its Solana-based platform GMTrade.xyz. According to the protocol, it will be targeting around 2% of the market cap in combined on-chain depth.

Secondly, all staking rewards will not be distributed directly to holders but redirected to the treasury, effective from Wednesday, March 4.

Those accumulated rewards will only be released once GMX trades above $90, and only proportionally to stakers who have maintained at least 80% of their peak staked balance throughout the waiting period.

Any breach of that threshold condition will result in forfeiture of all accumulated rewards with no exceptions. Also, a one-week buy-wall of 1 million GMX will be placed at $5 on on-chain exchanges to absorb any concentrated selling overhang.

Others join GMX in questioning buybacks

The reckoning at GMX is part of a wider disillusionment with open-market repurchases as a tokenomics tool. Across the industry, protocols spent more than $1.4 billion buying back their own tokens between January 1 and October 15, 2025, according to CoinGecko data.

Despite these efforts, prices for many of those tokens continued to fall. Jupiter, the leading decentralized exchange aggregator on Solana, spent over $70 million on JUP token repurchases across the year, roughly half its total protocol fee revenue.

The effort proved insufficient against $1.2 billion in scheduled token unlocks. Today, JUP has fallen by over 90% from its peak, and in January 2026, co-founder Siong Ong opened a public debate about halting the program entirely.

Siong asked on X, “what do you all think if we stop the JUP buyback?”

He also answered the same question in the same post, stating, “We spent more than 70m on buyback last year, and the price obviously didn’t move much. We can use the 70m to give out for growth incentives for existing and new users.”

Are there models that actually work?

Hyperliquid is most often cited as the counterexample when it comes to buybacks. The derivatives exchange deployed over $644 million in HYPE token repurchases in 2025, accounting for over 46% of all token buyback spending across the industry, and the funds came from trading fees that exceeded $100 million in August 2025 alone.

In December 2025, the Hyper Foundation proposed burning approximately $920 million worth of HYPE held in its Assistance Fund, making the supply reduction permanent. HYPE is up by 0.81% in the past 30 days, while Bitcoin and ethereum are both down more than 5.7% and 6.8%, respectively, over the same period.

Hyperliquid’s buybacks are funded from surplus trading revenue, automated, and result in permanent supply destruction. Jupiter’s were funded by diverting operating revenue and manually executed, and the tokens were locked rather than burned, meaning they could eventually return to circulation.

GMX’s new approach attempts to bridge the gap via treasury accumulation, as with Hyperliquid, combined with a hard lock-up and price-triggered distribution mechanism designed to reward only long-term holders. It’s not fully possible to gauge the success of the new strategy, as it just got off the ground.

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