Don't rush to buy back after raising funds for the project. AllianceDAO co-founders have provided a new approach to fund allocation.

2026-01-04 10:27:20

AllianceDAO Co-Founder QwQiao recently shared a viewpoint on social media: now is not the time for crypto projects to conduct regular buybacks. This seemingly simple suggestion actually touches on a core issue many project teams are struggling with—the question of how to allocate funds once they have cash on hand.

The Logic Behind the Perspective

Why shouldn’t projects rush into buybacks

QwQiao’s main stance is clear: project teams should use their generated revenue to expand their business, rather than using funds to buy back tokens. What is the reasoning behind this?

From the project development stage perspective, most crypto projects are still in the early expansion phase. During this stage, business growth, user acquisition, and technological iteration tend to have a much higher value than short-term support for token prices. Using revenue for business expansion is akin to investing in the project’s long-term growth, which can lead to more sustainable increases in token value.

In contrast, regular buybacks can signal confidence to the secondary market, but if the project itself is lacking growth momentum, such support is often short-lived.

When can buybacks be considered

QwQiao also provided an exception: if the project team believes their token is seriously undervalued, “opportunistic buybacks” can be acceptable. The key term here is “undervalued.”

This means buyback decisions should be based on rational judgment, not blindly following trends. Project teams need to have a clear understanding of their fundamentals and determine whether the token price truly deviates from its intrinsic value.

The Dilemma in Practice

Strategy	Advantages	Disadvantages	Suitable Scenarios
Business Expansion	Improves project fundamentals, long-term value growth	Difficult to directly stimulate token price in the short term	Early-stage projects with large growth potential
Token Buyback	Directly benefits the secondary market, quick short-term effect	If fundamentals don’t support it, effects are short-lived	Tokens are seriously undervalued with safety margins

These two options are not entirely mutually exclusive. The problem is that many projects, under market pressure, tend to be swayed by short-term token price fluctuations, leading to irrational capital allocation decisions.

Industry Insights

This viewpoint offers several lessons for current crypto projects:

Rationality over Following the Crowd: Don’t buy back just because others do; assess your own situation carefully.
Long-term over Short-term: Using revenue to expand the business essentially lays the groundwork for long-term token value appreciation.
Stage-specific Priorities: Different development phases require different capital allocation priorities.

From a personal perspective, QwQiao’s advice hits the core issue. Many crypto projects find themselves in trouble because they prematurely focus on “maintaining token price” rather than growing their business. Truly competitive projects are those that allocate revenue toward expanding market share, improving products, and attracting users.

Summary

Project teams should prioritize using revenue for business expansion, as this is a more pragmatic capital allocation strategy. Buybacks are not off-limits but should only be considered when the token is seriously undervalued, not as a routine operation. In other words, focus on building a solid business, and the token value will naturally reflect that. This approach is more constructive than repeatedly “bleeding” in the secondary market.

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