Aave DAO proposes $50M annual token buyback using DeFi revenue, aiming to make repurchases a permanent part of its strategy.
Aave DAO has introduced a new proposal to launch an ongoing token buyback program using $50 million annually from its DeFi revenue. The plan seeks to formalize token repurchases as part of the DAO’s capital strategy and expand on earlier successful initiatives.
The proposal, submitted by the Aave Chan Initiative (ACI), recommends using protocol revenue to repurchase AAVE tokens weekly. The buyback amount would range between $250,000 and $1.75 million, depending on market liquidity, volatility, and conditions.
The plan aims to make buybacks a long-term strategy rather than a temporary response to market movements. The proposal will go through the Aave Request for Comment (ARFC) phase for community input. After that, it will proceed to a Snapshot vote and onchain governance confirmation.
Execution would be handled by the Aave Finance Committee (AFC) in partnership with TokenLogic. The approach mirrors how corporate treasuries allocate capital while keeping the process transparent and rule-based.
This new $50 million plan builds on a previous short-term proposal introduced earlier in the month. That plan suggested a $20 million buyback to take advantage of the token’s current undervaluation.
The earlier proposal said that Aave’s treasury held enough surplus funds to proceed without affecting operations or reserves. It was framed as a temporary move to support price stability and investor confidence.
Now, with the new proposal, Aave aims to make buybacks a permanent part of its tokenomics. This marks a shift from one-time actions to a consistent strategy governed by the DAO.
In April, a similar $4 million buyback caused a 13% price increase in the AAVE token, showing previous community support for this approach.
The proposal also arrives as Aave prepares for its v4 protocol upgrade, which is expected in the last quarter of 2025. This update will introduce technical improvements, including a modular “hub and spoke” design.
The new architecture will allow lending markets to be customized while pooling liquidity more efficiently through hubs. It will also include features such as dynamic risk configurations to manage liquidation risks better.
These technical upgrades aim at improving performance, flexibility, and security across the protocol. The buyback plan may position Aave to increase long-term value alongside these system updates.
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