A Sober Reflection on Tokenomics: Why Is It Hard to Copy Hyperliquid and MetaDAO's Playbook?

Author: Dougie, Member of Figment Capital

Translation: Felix, PANews

Over the past year or so, buybacks have become a mainstream topic in discussions about rising token prices. For almost every community question about governance models, buybacks have become the default option: When will there be a buyback? Why not buy back more? Does this team really care about their token? What’s truly interesting isn’t the sudden popularity of buybacks, but why they became popular. The rise of buybacks is not because they are clearly the optimal mechanism, but because faith in token design across the entire market has completely collapsed.

For years, the crypto industry has asked token holders and investors to view tokens as abstract representations of “governance” or “governance models,” without granting any enforceable rights or disclosing treasury usage transparently. Legal separation between foundations and development labs has blurred the lines of responsibility. Treasuries keep ballooning, budgets are never public, spending is rarely explained, and investors are expected to trust that all funds are being used “for growth.”

After a series of missteps, trust has gradually eroded. In this context, buybacks have not emerged as a sophisticated capital allocation strategy, but as the simplest, most straightforward gesture a team can make to show “we’re on your side, we won’t waste the treasury, we’ll reinvest funds into the token.” This is arguably the closest the market has come to a gesture of “fiduciary duty.”

This dynamic is most clearly embodied by Hyperliquid, which has quickly become the industry benchmark for commitments to token holders. But what’s often overlooked in the discussion is why Hyperliquid’s model works—and why almost no one can replicate it. Hyperliquid has never taken external funding. From day one, they built the entire protocol completely bootstrapped, found product-market fit early, generated substantial revenues, and did so without token sales or liquidity mining (apart from airdrops); meanwhile, they kept their cost structure near zero. They achieved a financial advantage nearly unattainable for other protocols: more money than they could possibly spend. In this context, buybacks are not a growth strategy, but a rational release valve—returning surplus funds because marginal spending does little for the business. For Hyperliquid, buybacks are primarily a byproduct of success; while they amplify that success, they are by no means its root cause.

However, many teams see buybacks as the reason for Hyperliquid’s success, not the result of it. This confusion has led to a distorted adoption of buybacks in the space. In traditional markets, buybacks typically appear late in a company’s lifecycle: only when R&D, market expansion, and acquisitions are saturated and the marginal returns on reinvestment have fallen. High-growth companies like Amazon, Nvidia (pre-2022), and Meta during their hyper-growth periods put every available dollar into future opportunities. They don’t do buybacks because it would throttle growth. In crypto, the logic has been flipped. The market no longer sees buybacks as an “earned privilege,” but as a baseline expectation—even for protocols still searching for product-market fit.

Buybacks expose a deeper issue: unclear rights for token holders

Events like Vector’s recent acquisition by Coinbase have made long-standing ambiguities around token holder rights even more apparent. Tensor’s TNSR token was never intended to represent company ownership, but many holders naturally expected a share of the acquisition proceeds. When they found themselves left out, discontent exploded—not because Tensor did anything wrong, but because the ecosystem has conditioned token holders to expect value via “implication” rather than explicit terms. This is not a failure of any single project, but a failure of crypto’s cultural norms around token rights. Buybacks have become a symbolic way to “add value,” but have never clearly defined what token holders are entitled to. Tensor chose clarity over ambiguity, and the reaction shows just how rare that clarity is.

MetaDAO as the opposite: ownership, clarity, and market-based governance

In this context, MetaDAO has emerged as a radically different approach—one that resonates with more builders and investors precisely because of its clarity.

MetaDAO is not just “Futarchy in practice”; it’s an issuance framework where teams sell tokens via transparent structures, allocate a portion to a treasury, and from day one treat the token as the sole unit of ownership—no equity layer, no ambiguity, on-chain treasury revenue, clear unlock rules aligned with community interests. The governance structure gives token holders real, substantive control over decisions. Increasingly, the system leverages market-based decision making—using Futarchy and prediction markets to objectively evaluate outcomes on specific capital allocation questions.

(Related reading: Futarchy: When prediction markets become governance weapons—a governance experiment that could disrupt the DAO decision-making paradigm)

The appeal of MetaDAO is that it offers a model where value flows, rights, and incentives are fully transparent (not just implied). Buyers know what they’re buying. Teams know what they’re giving up. Token holders know how decisions are made. In many ways, MetaDAO achieves the clarity that buyback mechanisms were originally meant to approximate.

But just as Hyperliquid shouldn’t be blindly imitated, neither should MetaDAO. The very features that make MetaDAO so attractive—community-controlled treasuries, clear ownership tokens, decentralized decision-making—are precisely what many early-stage startups can’t accept. Achieving product-market fit (PMF) requires speed, and rapid iteration requires unilateral decision-making. Many teams don’t want to outsource strategy to governance, prediction markets, or token holder votes—and they shouldn’t have to. Futarchy only becomes powerful when a protocol already has clear KPIs and predictable feedback loops; when a team is still searching for a market, refining a product, and iterating at the speed needed to survive, such mechanisms just become unwieldy.

The unifying insight: Hyperliquid and MetaDAO succeed because of transparency

This is why it’s important to step back and ask what Hyperliquid and MetaDAO really reveal. On the surface, their philosophies seem polar opposites: one is a more centralized buyback mechanism, the other a decentralized ownership design. But at a deeper level, they demonstrate the same basic truth: both models work because they provide clear rules. Hyperliquid clearly explains how value flows back to token holders; MetaDAO clearly defines what token holders own and how decisions are made. The fundamental reason for their success: token holders can understand the rules of the game.

This clarity stands in stark contrast to the ambiguity and opacity that pervades today’s token ecosystems. Before the US SEC mandated standardized disclosure in the 1930s, investors distrusted company filings and public stocks often traded at steep discounts. Back then, the market didn’t crave buybacks—it craved information. Crypto today is in a similar “pre-transparency era”: opaque treasuries, fuzzy budgets, returns on spending almost never disclosed, governance more form than substance, token rights rarely explicit. The result is obvious: issuance feels like taxation, fee rates feel like taxation, treasury spending feels like taxation. Token holders have only one way to “fight back”—to sell.

That’s why buybacks feel good, and why MetaDAO feels good—they both dramatically reduce ambiguity, making everything legible and understandable, thereby rebuilding trust.

Transparency, not any specific mechanism, is the foundation of a healthy token economy

Yet, neither of these mechanisms is universal, nor should they be dogma. The real lesson of the past year is not that “buybacks are the only future” or that “Futarchy is the only future,” but that transparency is the future. The industry must stop searching for a single “orthodox” token design and instead build a culture where projects clearly explain to the market: how funds are used, what rights token holders have, how the protocol plans to develop. Traditional financial markets solved this through standardized financials, shareholder letters, and regulation; crypto can solve it through on-chain accounting, public treasuries, predictable token vesting, explicit rights statements, and governance aligned with actual control (whether centralized or decentralized).

Hyperliquid and MetaDAO are not “standard” models. They simply happen to fit their specific model, stage of maturity, and incentive structure. Hyperliquid succeeded because it could launch without outside capital, achieved super-high revenues early, and operated at unmatched speed. MetaDAO succeeded because it established ownership around the token from the beginning and gave the community real control over the treasury and roadmap. These approaches aren’t doctrinal rivals, but important case studies in how value flow aligns with the structure and needs of the underlying project.

Conclusion: Transparency over dogma

The true future of token design will never be one where every protocol adopts buybacks or governs every decision via Futarchy. The real future is one where teams choose mechanisms that fit their needs, and investors reward those who are transparent about how their mechanisms work. A healthy token economy is never built on a single model, but on clarity, transparency, and smart choices.

When teams publicly share how they invest in themselves, what token holders get, and why their design choices make business sense, the market can finally do its job: assess competitiveness and predict outcomes.

That’s the real goal the next era of crypto should pursue—far more important than one-size-fits-all buybacks or universal Futarchy.

Further reading: Which should token holders choose? Buyback and burn or dividends, opening a new game of token value appreciation