Blockworks Consulting Head: Protocols should prioritize revenue for growth rather than token buybacks

Odaily Odaily reports that David, Head of Consulting at Blockworks, stated in an article on the X platform that he, his team, and the Blockworks Advisory team have written extensively about token buybacks. He pointed out that his team is the only opponent of the Aave token economic model and holds a similar view on the Jit token economic model, consistently believing that allocating capital or revenue to growth, such as vertical or horizontal expansion and customer acquisition, is the right path for many, if not all, protocols.

He emphasized that no protocol is currently immune to competition, regardless of its dominance or free cash flow generation capabilities, including Hyperliquid. Finally, citing his article on Aave's token economics model, he stated that in a highly competitive and dynamic industry, merely maintaining current regional dominance is insufficient to ensure continued future leadership. The risks of using revenue to indiscriminately buy back tokens are twofold: first, it suggests the protocol lacks competitive pressure; second, it implicitly acknowledges that the revenue cannot be used elsewhere to solidify a long-term moat. David believes the overall industry size is still small, and protocol teams need to think with a longer-term perspective.