> ## Documentation Index
> Fetch the complete documentation index at: https://pairdocs.mintlify.site/llms.txt
> Use this file to discover all available pages before exploring further.

# Buybacks: Automated Token Repurchases From Trading Fees

> PAIR uses a configurable portion of creator fees to automatically buy back the PAIR token from the open market on Solana, creating buy pressure.

Buybacks are one of the three destinations you can allocate creator fees to when you launch a PAIR. When the buyback allocation is non-zero, the protocol accumulates those fees in a buyback treasury and uses them to purchase the PAIR token directly from the open market on Solana. This creates real, fee-funded buy pressure tied to actual trading activity.

## What Buybacks Do

Every trade on a PAIR token generates fees. If you have allocated a percentage of those fees to buybacks, that portion flows into the buyback treasury. The protocol then uses the accumulated funds to buy the PAIR token back from the market — the same way any other market participant would — through the bonding curve or open market, depending on the token's stage.

The core purpose of buybacks is threefold:

<CardGroup cols={3}>
  <Card title="Create Buy Pressure" icon="arrow-trend-up">
    Fee-funded purchases create consistent demand for the PAIR token, sourced directly from the trading activity the token itself generates.
  </Card>

  <Card title="Align Incentives" icon="handshake">
    Creators, holders, and the protocol all benefit when trading volume is high, since more volume means more fees, and more fees mean more buybacks.
  </Card>

  <Card title="Reward Long-Term Holders" icon="trophy">
    Buybacks can benefit holders indirectly by supporting the token price over time, complementing the direct holder rewards distribution.
  </Card>
</CardGroup>

## How Buyback Funds Accumulate

When you configure your PAIR's fee allocation, you set a buyback percentage using the allocation slider. Every time the fee router processes a trade, your configured percentage of the fee is directed to the buyback treasury. Funds accumulate there until the buyback trigger condition is met.

### Example

If you set the buyback allocation to **30%** and your PAIR token generates **1 SOL** in trading fees:

```
1 SOL in trading fees × 30% buyback allocation = 0.3 SOL directed to buybacks
```

That 0.3 SOL accumulates in the buyback treasury. When the trigger condition is met, the protocol uses those funds to purchase the PAIR token from the market.

<Warning>
  Buyback amounts depend entirely on trading volume. Higher volume generates more fees and therefore more buyback activity. Lower volume generates less. Buyback frequency and size are not guaranteed and will vary based on market conditions and actual trading activity.
</Warning>

## Trigger Mechanism

<Note>
  The precise trigger mechanism for buybacks — whether they execute automatically per-trade, on a periodic schedule, when the treasury reaches a threshold, or on-demand — is part of the active development roadmap. This page will be updated once the behaviour is confirmed and live.
</Note>

Buybacks are designed to execute automatically without requiring manual action from the launcher or any participant. The exact conditions that trigger a buyback event will be documented here once the mechanism is finalised.

## What Happens to Bought-Back Tokens

<Note>
  The treatment of bought-back tokens — whether they are burned (permanently removed from supply), redistributed to holders, or held in the treasury — is to be confirmed. This page will be updated once the post-buyback token handling is finalised and live.
</Note>

The destination of repurchased tokens has meaningful implications for holders. Token burns reduce total supply, which can affect price mechanics. Redistribution routes the tokens back to holders directly. The PAIR team will publish the confirmed behaviour here.

## Buybacks vs. Holder Rewards

Both buybacks and holder rewards benefit token holders, but they do so differently:

|                      | Buybacks                             | Holder Rewards                             |
| -------------------- | ------------------------------------ | ------------------------------------------ |
| **Mechanism**        | Protocol buys PAIR token from market | Fees distributed directly to holders       |
| **Benefit type**     | Indirect (market buy pressure)       | Direct (SOL or token distribution)         |
| **Requires holding** | No — affects all holders via price   | Yes — only current holders receive rewards |
| **Predictability**   | Depends on treasury trigger          | Depends on distribution schedule           |

<Tip>
  If you want to maximise direct, claimable returns for holders, weight the holder rewards allocation higher. If you want to create sustained market buy pressure that benefits all holders — including future buyers — weight buybacks higher.
</Tip>

## Related Pages

<CardGroup cols={1}>
  <Card title="Fee Allocation" icon="sliders" href="/concepts/fee-allocation">
    Learn how to configure your creator, buyback, and holder rewards percentages before launch.
  </Card>
</CardGroup>