Solana co-founder proposes buyback mechanism: Can it ease the unlocking token pressure

Solana co-founder toly recently expressed the view that the protocol should store funds for future buybacks. This suggestion has sparked new considerations regarding Solana’s tokenomics. According to the latest news, toly stated that such a mechanism would force all unlocked tokens to be traded at the expected price after buyback. Behind this seemingly simple proposal lies a deeper reflection on how Solana can address token supply pressures.

Core Logic of the Buyback Mechanism

Interpretation of the Proposal

The core of toly’s suggestion involves two key aspects:

• Protocol-level fund accumulation (rather than distributing to the community or developers)
• Using the accumulated funds to conduct periodic or irregular token buybacks
• Altering market expectations of future supply through buybacks

Why Was This Proposal Made

Solana’s token supply situation is relatively unique. According to the latest data, the total supply of SOL is 617,683,399 tokens, with a current circulating supply of 563,400,828 tokens, and the token has an infinite supply model. This means a large number of new tokens will enter circulation in the future. The gradual unlocking of vested tokens has always been a market focus, as these tokens entering circulation often exert downward pressure on the price.

Essentially, toly’s suggestion is to hedge this supply pressure through buybacks. If the protocol commits to buybacks, the market will incorporate this buyback expectation into the spot price, thereby weakening the impact of new token releases on the price.

Current Market Context of SOL

Realities of Token Supply Pressure

According to relevant information, SOL is currently priced at $135.75, with a market cap of $7.648 billion, accounting for 2.43% of the crypto market. While the price has been relatively stable, the infinite supply model implies long-term inflationary pressures.

Ecosystem Development and Technical Upgrades

It is worth noting that Solana is undergoing the major Alpenglow upgrade, which will delay the finality time from 12.8 seconds to 100-150 milliseconds, approximately a 100-fold performance increase. Meanwhile, activity on the Solana chain continues to grow—2025 data shows on-chain spot trading volume reaching $1.6 trillion, surpassing all centralized exchanges except Binance for the first time.

This vibrant ecosystem provides a foundation for implementing a buyback mechanism. Stronger network performance and higher activity levels mean the protocol has the capacity to accumulate more funds for buybacks.

Feasibility and Challenges of the Proposal

Feasibility Analysis

From a technical perspective, Solana, as an independent chain, has the capability to establish such a mechanism. The protocol could accumulate funds through transaction fees, MEV revenues, and other sources. Compared to public chains like Ethereum, which require complex governance, Solana’s decision-making process is relatively flexible.

Potential Challenges

• Funding sources: The protocol needs to clarify which revenue streams will be used for buybacks
• Governance issues: This involves major decisions by the Solana community and requires broad consensus
• Implementation concerns: The timing, scale, and frequency of buybacks need clear rules

Market Significance

This proposal reflects Solana’s proactive approach to tokenomics adjustment. Instead of passively enduring supply pressures, actively conducting buybacks demonstrates a more positive stance. If properly implemented, it could become an important policy direction for Solana in 2026.

From an investor perspective, buyback mechanisms are generally viewed as positive signals, as they directly support the token price. However, the sustainability of the buyback funds and their impact on ecosystem development investments are critical considerations.

Summary

to ly’s buyback proposal touches on the core issues of Solana’s tokenomics. Under an infinite supply model, actively hedging supply pressures through buybacks is a reasonable approach. The true value of this suggestion lies in its potential to drive more systematic optimization of Solana’s token economy. However, from proposal to implementation, there is still a long way to go, requiring community consensus, mechanism design, and oversight. The vibrant development of the Solana ecosystem provides a foundation for this mechanism, but its actual effectiveness remains to be seen through market validation.