MegaETH launchs a token buyback program funded by yield from the USDm stablecoin

MegaETH Foundation shared on X on May 7 that it had completed its first token buyback, using all net rewards accrued from the USDm stablecoin issuer through the end of April.

The foundation behind high-performance Ethereum Layer 2 blockchain MegaETH stated that the supply of USDm, its synthetic stablecoin that it created in partnership with Ethena, is now $480 million.

The buyback mechanism is funded by yield from USDm.

How will the MegaETH buyback program work?

Apart from confirming its first buyback, the Foundation stated that future buybacks will be programmatic and on-chain. It stated that its reasons for that structure were to prevent discretionary decisions, to support MegaETH’s own markets and use MegaETH’s own chain, rather than routing capital through external venues. 

The foundation also put out a disclaimer that USDm is neither issued nor operated by it and MegaLabs. The buybacks are also going to vary, as the foundation stated that “funds available for buybacks are unlikely to be the same each period. USDm supply rises and falls, and reward share is impacted by prevailing rates of return on underlying reserve assets.” 

As of May 1, Aave announced that it had crossed $575 million in deposits on MegaETH. 

Aave was one of the major DeFi protocols deployed at MegaETH’s mainnet launch in February, and its TVL trajectory speaks to the activity base generating the yield that will flow into future buybacks.

Does the token buyback model actually work in crypto?

The success of token buybacks has always depended on their execution and context. The clearest proof of concept to date is Hyperliquid, which led all protocols in 2025 buyback activity. According to reports, it spent approximately $645 million repurchasing HYPE tokens through its Assistance Fund, representing 46% of total buyback spending across the entire industry as of October 2025. The protocol reportedly routes 97 to 99% of its trading fees into buybacks and permanent burns.

On the other hand, Pump.fun’s experience tells a different story. The Solana-based meme coin launchpad allocated 100% of revenue to PUMP buybacks for nine months after launch. However, despite the burning and repurchases, the token traded roughly 81% below its all-time high and spent most of 2026 near record lows.

In late April, the team acknowledged the disconnect and pivoted its model, stating that it had burnt approximately $370 million worth of bought-back PUMP, about 36% of its circulating supply, and is now redirecting 50% of future revenue to operations, with the remaining half going to a new programmatic buyback-and-burn mechanism.

MegaETH is positioning itself closer to the Hyperliquid end of the spectrum than the Pump.fun end. 

Its focus on programmatic and on-chain execution, rather than Foundation discretion or one-off gestures, is a deliberate design choice and one that aligns with the direction token buyback programs have moved following blowback that usually follows projects that took opaque approaches. 

MegaETH’s native token, MEGA, rose by over 8% after 24 hours following the announcement, trading at $0.130. However, it is currently trading at 0.122.

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