Hyperliquid and Pump.fun’s “Token Deflation Experiment”

Seven years ago, Apple pulled off a financial feat whose impact surpassed even its most remarkable product. In April 2017, Apple opened its $5 billion Apple Park campus in Cupertino, California. A year later, in May 2018, the company announced a $100 billion stock repurchase program—an amount 20 times the investment in its 360-acre headquarters, nicknamed "the spaceship." This sent a core message to the world: Beyond the iPhone, it had another "product" as important as, and perhaps even more important than, the iPhone. At the time, it was the world's largest stock buyback program and part of Apple's decade-long buyback spree, during which the company spent over $725 billion on its own stock. Exactly six years later, in May 2024, the iPhone maker broke the record again, announcing a $110 billion buyback program. This move demonstrated Apple's mastery of creating scarcity not only in its hardware but also in its stock. Today, the cryptocurrency industry is employing a similar strategy, albeit at a faster pace and on a larger scale. Its two largest revenue engines—the perpetual futures exchange Hyperliquid and the meme token issuance platform Pump.fun—are dedicating nearly every penny of their fee revenue to buying back their own tokens. Hyperliquid set a record of $106 million in fee revenue in August 2025, over 90% of which was used to repurchase HYPE tokens on the open market. Meanwhile, Pump.fun's daily revenue briefly surpassed Hyperliquid's—on a single day in September 2025, the platform generated $3.38 million in revenue. Where did all this revenue ultimately go? 100% was used to repurchase PUMP tokens. In fact, this repurchase pattern has persisted for over two months. This operation gradually gives crypto tokens the attributes of "shareholder equity proxy" - this is rare in the cryptocurrency field, after all, tokens in this field are often sold to investors at the first opportunity. The logic behind this is that cryptocurrency projects are trying to replicate the long-standing success path of Wall Street's "dividend aristocrats" (such as Apple, Procter & Gamble, and Coca-Cola): these companies spend huge sums of money to return to shareholders through stable cash dividends or stock buybacks. Take Apple, for example. In 2024, its stock repurchases reached $104 billion, representing approximately 3%-4% of its market capitalization at the time. Meanwhile, Hyperliquid achieved a 9% "floating supply offset" through buybacks. Even by traditional stock market standards, this figure is staggering, and in the cryptocurrency world, it's unheard of. Hyperliquid's positioning is clear: it has created a decentralized perpetual futures exchange that offers the smooth experience of centralized exchanges like Binance, but runs entirely on-chain. The platform supports zero gas fees, high leverage trading, and is a Layer 1 platform centered around perpetual contracts. By mid-2025, its monthly trading volume had exceeded $400 billion, accounting for approximately 70% of the DeFi perpetual contract market. What really makes Hyperliquid stand out is how it uses funds. The platform allocates more than 90% of its daily fee income to a "rescue fund", which is used directly to purchase HYPE tokens on the open market. As of this writing, the fund has accumulated over 31.61 million HYPE tokens, valued at approximately $1.4 billion – a tenfold increase from 3 million in January 2025.

This buyback spree reduced the circulating supply of HYPE by approximately 9%, pushing the token price to a peak of $60 in mid-September 2025.

At the same time, Pump.fun has reduced the circulating supply of PUMP tokens by approximately 7.5% through buybacks. This platform, with extremely low transaction fees, transformed the "Meme coin craze" into a sustainable business model: anyone can issue tokens on the platform, build a "bonding curve," and let the market enthusiasm ferment freely. This platform, which was originally just a "joke tool," has now become a "production factory" for speculative assets. However, hidden dangers also exist. Pump.fun's revenue is highly cyclical, as it's directly tied to the popularity of meme token issuance. In July 2025, the platform's revenue plummeted to $17.11 million, its lowest level since April 2024, and buybacks subsequently decreased; by August, monthly revenue had rebounded to over $41.05 million. However, sustainability remains an open question. When "meme season" cools down (as it has in the past and will inevitably do in the future), token buybacks will also decline. More seriously, the platform is facing a $5.5 billion lawsuit, with the plaintiff alleging that its business is "similar to illegal gambling." Currently, the core of Hyperliquid and Pump.fun's success is their commitment to returning revenue to the community. Apple has returned nearly 90% of its profits to shareholders through buybacks and dividends in some years, but these decisions were mostly periodic, "bulk announcements." Hyperliquid and Pump.fun, on the other hand, consistently return nearly 100% of their revenue to token holders daily—a model that's ongoing. Of course, there are fundamental differences between the two: cash dividends are "in-hand income," taxable but stable; buybacks, on the other hand, are at most a "price support tool"—their effectiveness will be lost if revenue declines or token unlocking far exceeds buybacks. Hyperliquid faces an impending "unlock shock," while Pump.fun must contend with the risk of a "meme coin frenzy." Compared to Johnson & Johnson's 63-year record of consistently increasing dividends or Apple's long-term, stable buyback strategy, these two crypto platforms' operations are more like a tightrope walk. But perhaps this is already a difficult task in the crypto industry. Cryptocurrencies are still in their maturing stages and haven't yet established a stable business model, yet they've already demonstrated astonishing growth. Buybacks possess precisely the elements that drive industry acceleration: flexibility, tax efficiency, and deflationary properties—characteristics that align perfectly with the speculation-driven crypto market. So far, this strategy has transformed two projects with completely different positioning into top-tier revenue generators. Whether this model can be sustained in the long term remains to be seen. But what is clear is that for the first time, it has allowed crypto tokens to shed the label of "casino chips" and become more like "company shares that generate returns for holders"—at a rate that could even put Apple under pressure. I believe this holds a deeper revelation: Apple, long before the advent of cryptocurrency, understood that it wasn't just selling iPhones; it was selling its own stock. Since 2012, Apple has spent nearly $1 trillion on buybacks (more than the GDP of most countries), reducing its outstanding shares by over 40%. Apple's market capitalization remains above $3.8 trillion, in part because it views its stock as a "product that requires marketing, polish, and scarcity." Apple doesn't need to raise capital through additional stock issuance—its balance sheet is flush with cash, making the stock itself the "product" and shareholders the "customers." This logic is gradually permeating the cryptocurrency space. The success of Hyperliquid and Pump.fun stems from the fact that, rather than reinvesting or hoarding the cash generated by their businesses, they convert it into "purchasing power that drives demand for their own tokens." This, in turn, is changing investors' perceptions of crypto assets. While iPhone sales are certainly important, Apple bulls know the stock has another driving force: scarcity. Traders are now forming a similar narrative around HYPE and PUMP tokens—they see these assets as backed by a clear promise: every purchase or transaction based on the token has a greater than 95% probability of being converted into a "market buyback and burn." But Apple's case also reveals another side: the strength of its buybacks is always determined by the strength of its underlying cash flow. What happens if revenue declines? When iPhone and MacBook sales slow, Apple's strong balance sheet allows it to meet its buyback commitments through debt issuance. Hyperliquid and Pump.fun lack this cushion—if trading volume declines, buybacks will stall. More importantly, Apple can turn to dividends, services, or new products to deal with the crisis, while these crypto protocols currently have no "backup plan."

For cryptocurrencies, there is also the risk of "token dilution."

Apple doesn't have to worry about "200 million new shares entering the market overnight," but Hyperliquid faces this problem: starting in November 2025, nearly $12 billion worth of HYPE tokens will be unlocked to insiders, far exceeding the daily repurchase volume. Apple can freely control the amount of its shares outstanding, while crypto protocols are bound by token vesting schedules written down years in black and white. Even so, investors see value and are eager to participate. Apple's strategy is obvious, especially to those familiar with its decades-long history—it has fostered shareholder loyalty by transforming its stock into a "financial product." Now, Hyperliquid and Pump.fun are attempting to replicate this path in crypto, albeit at a faster pace, with greater fanfare and higher risk.