Aave DAO Proposes Permanent $50M Annual Buyback to Bolster AAVE Token Value

The Aave DAO is evaluating a significant update to its tokenomics with a proposal for a permanent $50 million annual buyback program for AAVE tokens, funded entirely by protocol revenue. Introduced by the Aave Chan Initiative (ACI), this plan aims to transition buybacks from a pilot program to a standard operational feature, reinforcing Aavenomics by translating revenue into sustained price support.

Under the proposal, weekly buybacks would range from $250,000 to $1.75 million, managed jointly by TokenLogic and the Aave Finance Committee (AFC). The amounts are designed to be flexible, adjusted based on market conditions, liquidity, and earnings, with the AFC permitted to use up to 75% of weekly targets depending on available funds. The process involves a Snapshot poll followed by an on-chain vote for final implementation.

DeFiLlama data indicates Aave's protocol revenue is approximately $169 million annually, with $13.9 million generated in the past 30 days, which comfortably covers the $50 million buyback even after operational expenses. Early community feedback has been largely positive, and Aave founder Stani Kulechov has voiced support for the increased target.

Despite the proposal, AAVE's price faces pressure, trading near $218 at press time, down about 5% for the day, with fluctuations between $215 and $231. Technical analysis reveals a bearish pattern, with key support at $215 and potential for a deeper correction to $135 if sentiment weakens, as noted by analyst Ali Martinez. The proposal precedes the Aave v4 rollout expected in late 2025, which will introduce a hub and spoke framework to enhance liquidity and risk management, potentially impacting future revenue and buyback sustainability.

This move aligns with a broader trend in DeFi, where protocols like Uniswap, Pump.fun, and Raydium are adopting buybacks for capital efficiency and token value capture. Aave continues to expand, surpassing $25 billion in outstanding loans and launching innovations like the Horizon stablecoin borrowing platform and integrations with Maple Finance's yield-bearing assets.