PROSPER Launches Performance Markets on Pharos With Fee-Funded Buybacks for Vault Tokens

In the first eight months of 2026, crypto protocols spent $638 million on buying back their own tokens, a significant increase from $545 million in the same period last year and a few hundred thousand dollars in 2024. Hyperliquid and Pump.fun were the main contributors to these token buybacks, as both protocols earn real fees and decided to pass them to their tokens by buying and subsequently burning them.

PROSPER, a new platform on the Pharos Network, introduces a performance-based token buyback mechanism within a single trading strategy. Any curator with a proven track record can create a vault, allowing investors to buy shares in the strategy and a separate token called p{VAULT}. The p{VAULT} token has a fixed supply of 1 billion tokens and is sold through a public bonding curve, with no allocation for the curator, the team, or early backers.

The p{VAULT} token does not represent ownership in the vault nor track its net asset value (NAV). Instead, its price is determined by the bonding curve and external market forces. The performance of the vault is displayed alongside the token's price, akin to a company's published results alongside its stock, but with a clear distinction that the token is not a share.

When a vault's performance surmounts its previous peak and performance fees become eligible, a predetermined portion of those fees is used to buy p{VAULT} tokens on decentralized exchanges, which are then permanently burned.

The buyback mechanism aims to shrink the p{VAULT} supply when strategies consistently set new highs, thus increasing scarcity. If a strategy fails to generate profits, the token's value becomes solely dependent on market perception. PROSPER emphasizes that the buyback is an automated protocol function, not a price-support or market-making program, ensuring the distinction between a token with intrinsic value and one whose value relies on market perception.