Arbitrum Announces Buyback Program to Acquire ARB Tokens Amid Price Decline

Arbitrum announced a strategic buyback plan to acquire ARB tokens amid a prolonged price decline. Its backing company, Offchain Labs, marks a significant move

Amid a prolonged price decline and a forthcoming token unlock, Arbitrum announced a strategic buyback plan to acquire ARB tokens. Its backing company, Offchain Labs, is making a significant move to strengthen its commitment to the ecosystem.

The buyback comes as ARB has lost over 85% from its all-time high (ATH) and continues to lose ground.

Arbitrum Announces Buyback Program

In a post on X (Twitter), Offchain Labs highlighted that the initiative marks the continued development of Arbitrum’s ecosystem. According to the firm, technical advancements and strategic DAO initiatives are the main drivers for the Arbitrum network.

“We’re reinforcing our commitment to the ecosystem and strengthening our alignment by adding ARB to our treasury through a strategic purchase plan,” the company stated.

The firm also assured the community that purchases would follow predetermined parameters to ensure sustainability.

Meanwhile, this announcement comes just days before Arbitrum’s token unlock event. According to data on Tokenomist, the Arbitrum network will unlock 92.65 million ARB tokens, currently valued at $30.75 million. These tokens comprise 2.1% of the ARB circulating supply.

Thus, Offchain Labs’ buyback announcement coincides with this token unlocks event, with the plan to purchase ARB likely aiming to absorb the anticipated supply shock. A recent report suggests that 90% of token unlocks drive prices downward.

However, not everyone is convinced that buybacks are the right strategy. Yogi, a well-known wallet maxi, expressed criticism of the move, asserting that such a strategy lacks long-term vision. He drew a comparison to traditional equity markets, where excessive buybacks often indicate a slowdown in innovation.

“Pure buybacks alone feel uninteresting and short-sighted—they create scarcity without driving long-term growth or strategic value,” Yogi wrote.

He suggested a more diversified approach, proposing a framework where 30% of the treasury should be allocated to strategic buybacks and OTC (Over-the-Counter) deals. Another 30% is directed toward liquidity provision to attract institutional players, and 20% is allocated for a yield-generating treasury for stable dividends.

Yogi also suggested 15% for ecosystem investments and 5% for a protocol insurance fund. In their view, this diversified strategy would better align incentives and enhance the protocol’s long-term sustainability.

Criticism Over Buybacks As ARB Price Struggles

Patryk, a researcher at Messari Crypto, shared similar thoughts. He noted that while such structured plans are beneficial, they can be difficult to formulate at the outset of a buyback initiative. He suggested that Arbitrum remain flexible and deploy funds into strategic areas over time rather than committing to a rigid framework.

“I think projects will do this eventually. It’s just difficult to announce a concrete plan for the funds at the beginning of buybacks, like those that Arbitrum just announced. Remain flexible,” the researcher suggested.

Despite the ongoing debate, the buyback announcement and token unlocks come as Arbitrum is experiencing renewed market attention. The ARB token recently received a listing on the Robinhood platform.

While the move had a temporary impact on boosting the ARB price, it failed to sustain a lasting uptrend. Additionally, Arbitrum has gained significant community support for its BoLD proposal. As BeInCrypto reported, the governance initiative aims to further decentralize decision-making and enhance network security.

Although Offchain Labs’ buyback plan signals confidence in the project, questions remain about whether it is sufficient to revitalize ARB’s market momentum. The broader sentiment around ARB remains cautious, considering the massive token unlocks that are still to come and their potential impact on the price.

“I think now may be a good time to short. Or sell. Or both,” Yogi remarked.

As Arbitrum reaches a crossroads, the effectiveness of this buyback strategy in revitalizing investor confidence and driving long-term growth will be closely observed. The discussion around strategic reinvestment versus pure buybacks continues to shape the narrative around Arbitrum’s future.