Altcoins Are Broken. Here's Proof

Hello and welcome to Coin Bureau's official podcast channel.

My name is Guy and if you're seeking unbiased in-depth information about Bitcoin,

cryptocurrencies, Web3, and all manner of related topics,

then you've come to the right place. I hope you enjoy today's episode.

We all know that altcoins have been underperforming for a long time now,

and everyone wants to know why.

After all, 2025 was set up to be the perfect year for face melting gains, but well,

that didn't happen and for most of us the only thing melting away has been our portfolios.

One of the reasons altcoins haven't performed the way people hoped for is

tokenomics, especially when it comes to token unlocks. Well, a recent report breaks down exactly

how this has impacted prices. So today we're going to summarize this report for you in simple terms,

tell you how the future of tokenomics is shaping up, and look at what this could mean for

altcoins in the future. My name is Guy and you're watching the Coin Bureau.

Today's report comes from Toconomist, a leading platform providing tokenomics insights and is

catchably titled, quote, annual report 2025. As always, you'll get the juiciest details right here

in this video, but we'll leave a link to the full report down in the description for you if you're

interested. Now, the report kicks off with token buybacks. In 2025, there were $8.1 billion in

buybacks, a massive 145% jump from the $3.3 billion in 2024. What's crazy is that 79% of that was

just for OKX's exchange token, OKB, with hyper-liquid hype in second place at just 8%.

Even without OKB, though, monthly buybacks still shot up in 2025 from $70 million in January

to $350 million in October. That's a 5X jump mostly fueled by hyper-liquid and aster.

Even more impressive, 17 of the 25 tracked DeFi projects in the report ran buybacks last year,

often sparking huge, albeit short-lived rallies. That said, the report stresses that not all buybacks

are equal. A $10 million Treasury funded buyback redistributed to stakers creates

fundamentally different dynamics than $10 million in revenue-funded burns. Same dollar amount

opposite tokenomic impact. So, the key takeaway. Always check where that money comes from

and where it's going. The report then notes that while token unlocks get all the attention,

buybacks are just as important since they have the opposite effect on supply.

To illustrate this, it looks at the 90-day performance of five different buyback models used

by DeFi projects. The most successful approach was funding buybacks and burns with revenue.

Tokens using this model jumped 73% on average in the first 90 days. The next best strategy was

using revenue to buy back tokens for the Treasury, which saw gains of about 61%. Pretty solid

results overall. On the flip side, though, projects using Treasury funds for buybacks saw tokens drop

about 33% on average. An even worse were projects combining sources like revenue, protocol fees,

and Treasury funds. Those tokens fell on average around 52% in the first 90 days. Ouch.

The report also notes that buybacks aren't for every project. They really only make sense for

established projects with steady revenue and a solid cash reserve. If a project starts

burning tokens too early, that's probably a red flag. The report also notes that Treasury

funded buybacks have a limited runway. There's only so far a Treasury can stretch. Conversely,

revenue-funded buybacks are much more flexible since they can scale with the protocol.

Burning tokens is usually more effective since it permanently cuts the supply while keeping

repurchase tokens in the Treasury doesn't obviously have the same effect. That said,

though, Treasury held tokens can still help with ecosystem growth and liquidity,

especially for newer projects with less certain futures. Buybacks can also be used for

air drops or to boost staking and attract new users. Done right, this shows genuine project

maturity rather than just using buybacks and burns purely to pump the price. However,

the report points out that, quote, buybacks mean nothing if emissions exceed them. For instance,

OKB achieved a 46% deflationary rate through massive buybacks and zero emissions. However,

EtherFi bought back 2% of its supply while emitting 64%, which still resulted in 62% inflation.

The report then highlights OKB's success in 2025. With $6.4 billion in buybacks funded entirely

by protocol revenue, OKB jumped about 300% in just a few days, which is insane.

Even crazier, OKB burned 93% of its supply that year, one of the biggest token burns in crypto

history, bringing its total supply down to 21 million to mirror bitcoins. Another standout

is hyperliquid, which devoted a whopping 97% of all trading fee revenue to continuous buybacks and

burns, the most aggressive setup in all of crypto. And with hype capped at 1 billion tokens,

this creates serious deflationary pressure. Then there's Arve, which kicked off $50 million

in annual buybacks last April. 20% of that went to liquidity providers while the other 80%

went to anti-go stakers, basically an incentive system for Arve's go stablecoin.

Anyhow, the report notes that Arve didn't see the same price jump, but the model is sustainable

since buybacks are distributed as ecosystem rewards, helping attract new users.

In any case, the report sees $8.1 billion in buybacks last year as a sign of crypto maturing.

More importantly though, it emphasizes, quote,

the 2025 buyback wave will not be remembered for dollar amounts. It will be remembered for which

protocols understood that where money comes from and where tokens go determines everything.

Definitely something to remember next time you DIY are.

Okay then, the next part of the report zooms in on how token burn mechanics have evolved

across different projects. But first though, I need to tell you about the Coin Bureau's telegram

channel. That's where we share the latest breaking news, provide deep dive alpha and give you

the most important market updates, all pinged directly to your device so you don't miss a thing.

So sign up today using the link in the description or the QR code on screen now.

But back to the report, which points out that token burns used to be mostly about cutting supply

and driving short term hype. But in 2025, projects started using burns to create long term value instead.

The report highlights three burn mechanisms that emerge last year. The first is using a portion

of project revenue to burn tokens. This method is predictable since revenue is easy to track,

but it can attract regulatory scrutiny, especially around securities laws because it closely

resembles stock buybacks. The second method uses an algorithm to burn tokens directly from the

treasury. It's lower risk from a regulatory perspective, but also less predictable.

The third method is governance driven burns where the community decides how much to burn and when.

This is the most transparent and decentralized burn approach, but the least predictable since

future votes could potentially reverse them by increasing token issuance.

Next, the report looks at how exchange tokens tweaked their burn mechanics in 2025.

It starts of course with OKB repeating the same headline figures from earlier,

$6.4 billion burned, 93% of supply gone, and a 46% deflation rate, all that good stuff.

But another example is BNB, which burned $4.7 billion, cutting supply by 3%.

With zero net emissions, that was pure deflationary pressure.

Bit gets BGB token joined the burn party too, burning over $1.3 billion worth and cutting supply

by about 15%. The catch though is that BGB added 12% back through emissions, so net deflation

was only 3%. Still, better than being inflationary. But it's not just exchange tokens,

major layer ones have tweaked their burn mechanisms too. Ethereum, for example, burned around

$280 million of ETH in 2025. Still, ETH ended the year slightly inflationary at 0.5%,

mainly because users moved to layer 2s after the DENCune upgrade made them cheaper and more efficient.

This reduced the amount of ETH being burned through main net transactions.

Another major change came from Solana, which made the biggest burn tweak in 2025.

In February, a Solana improvement document, or SIMD, changed how priority fees are handled,

cutting Sol's daily burn rate by about 95%. Overall, Solana burned $338 million worth of Sol,

roughly 0.3% of its supply. But with staking emissions adding 4.2%, Sol ended the year 3.9%

inflationary. Other layer ones stayed inflationary too, despite burning tokens.

The report highlights avalanche, near and aptos, all of which have token issuances that dominate

their supply dynamics. Surprisingly, memecoins led the way in token burn adoption in 2025.

Pingu burned 38% of its supply, while Bonk burned 12%. Both were team-driven decisions,

which the report sees again as a sign of maturity, less risk of the team dumping tokens on investors

later. The report also highlights two major governance events in 2025. The first was with hyperliquid,

where a validator vote in December approved converting trading fees to hype and sending

them to a day facto burn address with no private keys. This cut hype's fully diluted valuation,

or FDV, by $1 billion, and trimmed its circulating supply by 13%. The second big governance move

was UniSwap's unification proposal, approved the day after hyperliquids. It burns 100 million

unique from the treasury, flips on fee switches, and adds other features that boost token burns

to make unique deflationary. The report calls this quote, the most sophisticated burn mechanism

in DeFi. Either way, the report sees a clear pattern. Investors care more about consistent burns

than one-off events, while key metrics to watch in 2026 include the percentage of supply burned,

the 30-day burn value, the burn type, whether it was programmatic or discretionary, and the reasons

tokens were burned in the first place. Okay, the next part of the report looks at seven major token

generation events, or TGEs. At launch, these projects had a combined market cap of $9.3 billion,

and had raised $3 billion. They include bio-protocol, bearer chain, plasma, kaito, pump.fun,

story-protocol, and monad. What's wild is that all seven projects tanked in 2025,

averaging losses of over 60%. Many started with $1 billion market caps, but that's definitely not

the case anymore. And to make matters worse, over half a billion of their tokens are set to unlock

in 2026. Not great. Now, of the $3 billion raised across the seven projects, pump.fun took the

lion's share at $1.8 billion, or about 60% of the total. Notably, pump was one of three projects

to primarily raise funds publicly, along with plasma and bio-protocol. The other four raised most

if not all of their funds privately. Naturally, projects with extreme fully diluted valuations,

or FDVs, got hit the hardest. For context, FDV is basically what a project would be worth if all

its tokens were in circulation. It helped show how big a project could get, and whether the

current price is under or overvalued. Anyhow, the report highlights kaito, which raised $10 million,

but launched at a $2.8 billion valuation, with a massive 261x FDV multiple. Unsurprisingly,

dropped about 80%. Bio-protocol tells a similar story, launching at $2.8 billion after raising

just $37 million, a 77x multiple. Its biotoken collapse by an incredible 94%. Plasma's XPL and

bearer chains bearer followed the same pattern, both with huge multiples and falling roughly

88% and 87% respectively. Conversely, projects with more reasonable FDV multiples held up much

better, though they still took losses. For instance, pump.fun launched at a 3x multiple,

and only fell 38%, while Monad came in at a 6x multiple and lost just 20%. Intriguingly,

though, story protocol was the exception to the rule. It launched with a 19x multiple,

but only fell 9%, making it the best performer among the seven projects.

The report puts that down to strong project quality outweighing negative price action. Either way,

the report points to bio-protocol as a clear example of valuation disconnect. Raising $37 million

couldn't justify a $2.8 billion FDV and a 77x multiple, especially with just 47% of tokens in

circulation. After that 94% collapse, bios valuation dropped to just $78 million, giving it a more

reasonable 2.1x multiple. It's a stark reminder that extreme premiums aren't sustainable

without real network effects or revenue. For what it's worth, though, the report found no

correlation between the performance of these projects and whether they raised funds publicly

or privately. Okay, next, the report looks at projects that made major tokenomics changes in 2025,

starting with Jupiter. Joupe launched back in 2021 with a fixed supply of 1 billion tokens,

zero emissions, and a clean 50-50 split between community air drops in the team. But in early 2025,

a governance proposal slashed Joupe's supply from 10 billion to 7 billion tokens. That 30%

cut applied only to Joupe's non-circulating supply, preventing 3 billion Joupe from entering

circulation. Moreover, future community air drops are now decided through governance

votes rather than the protocol. Another example is wormhole, which launched back in 2020.

The original vesting schedule for the W token featured annual cliffs leading to huge token

unlocks. But in September 2025, wormhole rolled out a major tokenomics overhaul with W version 2.0,

introducing the wormhole reserve and tweaking governance staking rewards. More importantly,

wormhole smoothed out its vesting schedule. Key allocations, namely Guardian nodes,

community and launch, ecosystem and incubation and strategic network partnerships,

now unlock bi-weekly instead of annually. Meanwhile, investor and Guardian valedator vesting

got pushed back six months with final unlocks now set for October 2028. Notably, this doesn't

affect how many W tokens will be issued, but it does alter how heavily they'll enter circulation.

Another example is Solana, which launched with an 8% inflation rate that declines by 15% each

year until it reaches a steady 1.5%. Newly issued Sol is used to reward valedators with some

allocated to the Solana Foundation to fund development. The report notes this would cut total

emissions by roughly 22 million Sol and could make staking more attractive than defile lending

or liquidity provision. The report also points out that this serves as a reminder that inflation

tokenomics are a double-edged sword. They can incentivize ecosystem growth and network

security through valedators, but can also cause dilution over time and could discourage long-term

participation. Either way, these adjustments show a broader shift in how mature projects as

approach tokenomics. That's because projects can now rely on real data instead of pre-launch

assumptions. And finally, the report looks at some of 2025's most notable unlocks.

Now, as basic economics dictates, an increased supply while demand stays the same means prices

will go down. However, the report notes that the reality is more complex as a project's

fundamentals, market conditions, token utility and speculation all play a part two.

With that in mind, the report tracked token unlocks across 10 projects, ranging from $584 million

to $2.3 billion. The biggest was white bit with $2.3 billion in WBT unlocked, boosting its

supply by 15%. Despite this, though, WBT rallied 136%, thanks to strong revenue, utility and

burn mechanisms. Notably, though, WBT was the only tracked token to see gains instead of losses.

Athena is another standout with $1 billion in Ena tokens unlocked,

growing its supply by 140% in 2025. Perhaps unsurprisingly, Ena's price dropped 73%.

Ondo is another example with $860 million in Ondo unlocked,

growing its supply by 134%. This sent Ondo lower by 67%. Even Dogecoin, with just a 3% supply increase

fell by 52%, while Avalanche's 9% supply growth caused Avax to fall by 60% in price.

Meanwhile, Worldcoins' massive $1.1 billion unlock ballooned its supply by 76%, pushing its price

down 71%. The report also highlights 10 projects that saw extreme dilution with supply increases

ranging from 231% to a massive 858%. Now, you'll have to check out the full report to see which

cryptos these were, but the key takeaway is that all 10 projects saw their tokens fall dramatically.

In fact, the smallest drop was 66%, and some projects even went to zero. Yikes.

And with that, folks, we've reached the end of this report. And remember, you can check it out

in full in the description below. So, what does this mean for crypto in 2026, especially when it comes

to tokenomics? Well, if there's one theme that stands out in this report, it's project maturity.

Crypto projects are increasingly tweaking their tokenomics based on real market data to create value

and extend their longevity. It's clear that the projects taking these proactive steps are the

ones most likely to succeed in the long run. Now, this is something that's being discussed by

many analysts with some dubbing it tokenomics 2.0. Basically, this model encourages projects to

develop their structures in a way that provides value back to token holders. This could include

air drops or protocol revenue distributed to users. We suspect that many new projects will start

with this tokenomics 2.0 model ready to go. Another factor, meanwhile, likely to shape all coin

performance in 2026 is large token unlocks. Although, from our experience, these events often turn out

to be nothing burgers. That's simply because not all unlocked tokens are immediately sold. Instead,

price drops are usually caused by existing holders' panic selling to try and frontrun the unlock.

Ironically, that fear often does more damage than the unlock itself. That said, though,

it's important to keep an eye on token unlocks before they happen. A few big ones lined up for

2026 include Whitebit, which will unlock 81 million WBT on the 13th of March, boosting WBT's

supply by 27%, and pump.fun, which has 82 billion pump unlocking on the 12th of July,

inflating its supply by 19%. Meanwhile, other unlocks are much smaller. For instance,

Arbitrum will unlock 92 million ARB on the 16th February, a 1.8% supply growth, while Sui will

unlock 43 million tokens on the 1st of March, a 1.1% increase, and Athena will unlock 171 million

on the 5th of March, a 2.2% increase. All things considered, these are pretty minor,

and will leave a link in the description in case you want to track these events yourself.

In any case, if you take anything away from today's video folks, it's to remember to factor

tokenomics into your research. Unfortunately, this is an important factor that many investors overlook,

but it's something you must become familiar with if you want to have an edge as a successful crypto

investor. After all, a project can have the best tech, the best team, and the best marketing,

and indeed everything else. But if it has piss poor tokenomics, well, it's likely doomed from

the start. A project's tokenomics can be what determines if it pulls a 100x or goes to zero.

And if you're not sure how to assess tokenomics, then don't worry, it's not as intimidating as it

might sound. And luckily, we have a video that will teach you how to do just that, which you can

find right over here. And that is just about all from me for today though, but we want to hear

from you now. What tokenomics features do you hope to see in 2026? And will altcoins ever recover?

Let us know your thoughts in the comments below. If you want to see how institutions feel about Bitcoin,

then check out the video right over here. And if you want to see what could happen in the crypto

market in 2026, then check out the video right over here. Okay, thank you all for watching,

and I'll see you again very soon. This is Guy signing off.

Hello, Guy again. Before you go, if you have a moment, please do rate and review us. It really

helps the podcast grow and find new listeners. Okay, that's all for this episode. Thank you for

listening and see you again soon.