Aave DAO Proposes $50 Million Annual Token Buyback Funded By Protocol Revenue

• The initiative would fund token purchases through protocol revenue to support long-term value. 
• Weekly buybacks would range between $250,000 and $1.75 million, with adjustments allowed for market conditions. 
• If approved, the initiative would position Aave as one of the first major DeFi platforms to formalize an annual buyback program.

Aave (AAVE) DAO is reviewing a proposal from the Aave Chan Initiative (ACI), the protocol’s primary service provider – founded by Marc Zeller – to implement a $50 million annual AAVE token buyback program. 

The plan would formalize the protocol’s existing buyback efforts, making them a permanent feature of Aavenomics. Aave’s price edged 0.3% lower in the last 24 hours, trading at around $221. On Stocktwits, retail sentiment around the altcoin improved to ‘bullish’ from ‘neutral’ territory over the past day.

Embedding Buybacks Into Protocol Strategy

The proposal, published Wednesday, outlines a strategy to fund buybacks through Aave’s protocol revenue. The initiative is designed to sustain long-term token value, optimize treasury reserves, and create consistent buying pressure for AAVE. “With the expiry of the existing buyback initiative, and the strong success of the program, we think it is an opportune time to enshrine a buyback program to further enhance Aavenomics,” the proposal said.

Weekly purchases would range from $250,000 to $1.75 million, executed jointly by the Aave Finance Committee (AFC) and TokenLogic. The program allows flexibility to adjust buyback volume depending on market conditions, token volatility, and available revenue. 

By codifying the buyback process, ACI said it aims to provide predictable demand for AAVE tokens, potentially mitigating sharp price swings in volatile market conditions. Beyond the token buybacks, the ACI proposal also grants the AFC authority to leverage Bitcoin (BTC) and Ethereum (ETH) reserves for future initiatives, including collateralized debt creation and yield-bearing conversions, offering flexibility to support protocol growth.

Aave’s move reflects a broader trend in DeFi protocols seeking sustainable economic models that combine revenue generation with strategic token management. 

Read also: FalconX To Acquire 21Shares In Push Toward Crypto ETF Expansion: Report

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