New research from Grayscale indicates that token buyback programs at Aave and Jupiter are being outpaced by growth in circulating supply, leaving tokenholder yields negative even as both protocols generate positive earnings.

Grayscale head of research Zach Pandl set out both measures in an October 21 note on crypto asset valuations. According to the accompanying data, AAVE posted a 3.7% earnings yield against a -1.0% tokenholder yield, while JUP recorded a 3.5% earnings yield and a -2.6% tokenholder yield. Over ten months, Aave purchased more than 205,000 A, and the Litterbox Trust has burned roughly 134 million JUP.

Positive earnings, negative holder yields

Grayscale's adjusted earnings yield divides a protocol's earnings by its circulating market value, then subtracts the rate at which circulating supply grew. Its tokenholder yield counts only what reaches holders: staking rewards plus buybacks, minus new issuance, divided by circulating market value. In this framework, earnings means fees left after paying lenders, liquidity providers and other suppliers.

Because both measures subtract supply growth, the gap between them approximates the earnings that stayed with the protocol instead of reaching holders — provided Grayscale's issuance figure tracks circulating-supply growth. A negative tokenholder yield also means, by Grayscale's formula, that new issuance outweighed buybacks and staking rewards combined.

Source: Grayscale, chart accompanying its October 21 note.

Aave's buybacks refill a reserve that pays AAVE out

Aave began buying AAVE on the open market in April 2025. Its official documentation lists a $50 million annual budget, with weekly purchases of $250,000 to $1.75 million executed by the Aave Finance Committee. According to the DAO's funding report, the program acquired more than 205,000 AAVE — about 1.28% of total supply — in its first ten months.

Aave does not burn the tokens it buys. They go to the Aave DAO Ecosystem Reserve, which pays staking rewards, grants and service providers, meaning AAVE taken off the market can return to circulation. That may help explain how a sustained buyback program sits alongside a negative tokenholder yield.

Operating costs draw on the same revenue. A March governance proposal sought to cut the buyback budget to $30 million, citing borrow-fee revenue about 25% below its peak, January 2026 revenue of $7.95 million against $13.5 million a year earlier, and an optimistic 2026 operating budget of $190 million against 2025 revenue of $142 million. The proposal also argued against larger buybacks, contending that spending on GHO stablecoin liquidity and growth could return more to holders than repurchases.

Jupiter devotes half its onchain revenue to JUP purchases

Jupiter's transparency page says 50% of onchain revenue has gone to the Litterbox Trust since February 2025, which buys JUP through automated onchain purchases. The trust operates as a long-term reserve and has burned about 134 million JUP. The other half of onchain revenue, along with all offchain revenue, funds the team's operations, with any excess going to treasury reserves.

In Grayscale's figures, those purchases and burns have not kept pace with the new JUP entering circulation. The note names token unlocks alongside issuance as sources of dilution, making Jupiter's unlock schedule the other half of the JUP picture.

Ordinary holders sit below the published figure. JUP holders receive no direct share of protocol fees, and Active Staking Rewards are distributed quarterly to stakers based on time-weighted stake. Under Jupiter's tokenomics rules, locked team tokens cannot earn them. Because Grayscale's tokenholder yield includes staking rewards, anyone holding JUP or AAVE without staking earns less than the figures show.

Burns are permanent, minus new minting

A burn is the one destination from which tokens cannot be paid back out, though minting can still eat into the reduction. PancakeSwap's September burn report puts numbers on that offset: minting offset about 22% of the burn. The report excludes mints tied directly to burning and spreads weekly burns across reporting months. According to PancakeSwap's tokenomics documentation, minted CAKE funds farms, the lottery and ecosystem growth.

Hyperliquid burns without a matching mint on this side of the ledger. Its fee documentation says the Assistance Fund converts allocated trading fees into HYPE and burns them. Hyperliquid has since added reserve-income funding to its buyback model, which raises the money available for purchases without itself showing how much was bought.

Disclosures that will test these numbers

If Grayscale updates its chart, a narrower gap between the two yields would show more of AAVE's and JUP's earnings reaching holders, while a wider one would point to supply growth or retained spending absorbing more of them. Aave's buyback budget remains a governance variable, as the March proposal to cut it to $30 million demonstrates, and Jupiter's unlock schedule — which the note names alongside issuance as a source of dilution — will govern how much new JUP reaches circulation regardless of the trust's purchases.

This article is provided for informational purposes only and does not constitute financial or investment advice. Research yield estimates are not guaranteed payouts or forecasts of token-price performance.