DeFi Embraces Buyback Strategies from Traditional Finance to Enhance Stability

The Ether.fi (ETHFI) community has put forward a $50 million token repurchase plan intended to support the market and boost liquidity for its native asset. Announced on October 28, 2025, the proposal would trigger buybacks whenever ETHFI’s price falls below $3, utilizing protocol resources to acquire tokens and decrease the circulating supply, as detailed in the

. This strategy mirrors a broader movement in both traditional finance and the crypto sector, where organizations such as , , and have recently adopted similar initiatives to reinforce investor trust and maintain stable valuations.

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buyback is designed to adjust in scale alongside the protocol’s revenue growth. Starting with a $50 million allocation, the plan permits greater buyback activity as Ether.fi’s income increases. By shrinking the available token supply, the initiative aims to improve the balance between supply and demand, which could positively influence the token’s price. Additionally, the program seeks to set a psychological support level at $3, helping to prevent steep price drops that might discourage new participants or undermine current holders’ confidence, according to the proposal.

This method signals a shift toward more active governance in decentralized finance (DeFi). Unlike conventional corporate buybacks, which typically need shareholder approval, the ETHFI plan relies on decisions made by the community. The Ether.fi group has emphasized advantages such as improved liquidity, decreased volatility, and the preservation of long-term value. By showing a commitment to market steadiness, the proposal could appeal to institutional investors who value reliable token economics, as outlined in the proposal.

Nevertheless, the outcome of the program will depend on several elements. Sustained revenue is essential to fund ongoing buybacks as market conditions change. Transparent execution will also be crucial to avoid suspicions of market manipulation. Some critics warn that overly aggressive buybacks, if not carefully timed, could disrupt market behavior or make the protocol overly reliant on its own funds instead of organic demand, a point raised in the proposal. Furthermore, the inherent volatility of the crypto market means that even a $3 price floor could be tested during significant downturns.

The ETHFI initiative is part of a broader trend of buyback announcements across various asset types. In traditional markets, BASF SE’s €1.5 billion buyback and Kaldalón hf.’s Icelandic equity repurchases highlight the popularity of share buybacks for enhancing shareholder value. At the same time, Metaplanet Inc.’s $500 million Bitcoin-backed buyback demonstrates how crypto-focused companies are experimenting with hybrid financial tools to stabilize token prices. These cases underscore the significance of the ETHFI proposal in a market where stability is increasingly viewed as a strategic edge.

As the plan advances toward execution, Ether.fi’s governance will be instrumental. The community must carefully balance ambition with prudence to ensure the buyback serves as a lasting solution rather than a temporary fix. If managed well, the program could establish ETHFI as a benchmark for DeFi projects aiming to maintain token stability while supporting sustainable ecosystem development.