DeFi protocol with $294m in deposits begins token buyback scheme

Treehouse is the latest decentralised finance protocol to become its own biggest whale by recycling transaction fees to buy and push up the value of its own tokens.

On Tuesday, the DeFi protocol with $294 million in investor deposits announced a plan to plough back 50% of the fees it earns from its fixed-income Ethereum cryptocurrency product, called tETH, into recurring purchases of its Tree native tokens.

Treehouse CEO Brandon Goh framed the move as a “foundational step” for the protocol.

“The Tree buyback programme is part of a broader effort to build sustainable demand for Tree and strengthen the DAO’s financial foundation over time,” Goh said.

Treehouse’s bet lands as buybacks among DeFi protocols are becoming more common. The likes of Jupiter, dYdX, Hyperliquid, and Aave have launched token buyback schemes.

In an industry that appears obsessed with infinite upside, these DeFi protocols have discovered a more old-fashioned trick: spend your own earnings to support your stock.

But the results have been mixed.

Hyperliquid’s buyback programme helped push its Hype token price to a $60 peak. While it’s down 41% from that all-time high amid the current market slump, Hype has gained 45% on average during Hyperliquid’s buyback programme, according to market data from Biteye.

Conversely, the native tokens of protocols like Aave, Jupiter, and Pump.fun haven’t soared with their respective buyback schemes. Aave’s token has declined 27% compared to the average buyback price, while Jupiter and Pump.fun are down 36% and 40% respectively.

The price of Tree tokens has doubled since the announcement. The token is still 35% off its peak price of $0.4 achieved in August.

Osato Avan-Nomayo is our Nigeria-based DeFi correspondent. He covers DeFi and tech. Got a tip? Please contact him at osato@dlnews.com.