Aave DAO unveiled a plan to conduct a $50 million annual token buyback funded by DeFi revenue. The program goals for continuous and continuous AAVE repurchases. It establishes buybacks as an integral a part of governance.
The proposal got here from the Aave Chan Initiative (ACI) on Wednesday. It places the token buyback policy inside Aave’s tokenomics reasonably than short bursts. The scope focuses on the usage of protocol revenues already generated.
The framework treats Aave DAO as an allocator of DeFi revenue. It describes roles, boundaries and pace. It keeps execution inside transparent governance tracks.
AAVE Repurchase Allocation. Source: Aave Governance
Execution Mechanisms: Weekly AAVE purchases through AFC and TokenLogic
The plan assigns execution to the Aave Finance Committee (AFC) and TokenLogic. You would purchase AAVE weekly with DeFi income. The size relies on market conditions.
Weekly purchases range from $250,000 to $1.75 million. The bands allow flexibility by way of liquidity and volatility. They also reduce slipping of thinner books.
Sources of funding remain protocol revenue. The plan avoids the usage of operational budgets or risk buffers. It directly links token buybacks to Aave DAO’s money flows.
Governance process: ARFC verification, snapshot voting, on-chain confirmation
The suggestion is first forwarded to Aave Request for Comment (ARFC). This phase collects community feedback on scope and parameters. It sets inputs before every vote.
Next, the DAO conducts a snapshot vote. Snapshot tracks off-chain sentiment without gas costs. It signals whether you must advance.
If support holds, the token buyback might be accomplished through on-chain governance voting. This step authorizes execution by AFC and TokenLogic. It maintains accountability at every stage.
DeFi Revenue and Tokenomics: Guidelines, Pace and Limits
The Aave DAO token buyback is tied to DeFi revenue reasonably than external capital. It scales with log income. It matches right into a rules-based schedule.
The AAVE buying range – $250,000 to $1.75 million per week – provides clear direction. AFC and TokenLogic can adapt inside these limits. They react to liquidity and volatility.
The structure embeds tokenomics into operations. It defines who executes, when and the way much. It maintains governance control to vary parameters.
In April, the community approved a $4 million AAVE buyback. AAVE rose roughly 13% in reference to this decision. The figure stays a part of the record.
On Friday, a separate plan called for an instantaneous $20 million buyback. The undervaluation of AAVE and the capability of the Treasury were cited. The aim was to act without affecting expenses or reserves.
The latest Aave DAO proposal differs in duration and structure. It moves from one-time actions to a everlasting token buyback. It builds a predictable rhythm around DeFi revenue.
Aave v4 upgrade: Q4 2025 hub-and-spoke and dynamic risk
The Aave v4 upgrade is scheduled for Q4 2025. It introduces a modular hub-and-spoke design. Hubs pool liquidity while spokes host customizable markets.
This architecture separates shared liquidity from market logic. Teams configure spoke parameters without fragmenting core funds. The goal is efficient, scalable lending venues.
Aave v4 also adds dynamic risk configurations for multi-asset portfolios. Parameters adapt to portfolio conditions. The design goals to cut back liquidation risk across all positions.
ACI authored the Aave DAO token buyback proposal. AFC and TokenLogic process weekly AAVE purchases. The community reviews, votes and confirms.
ARFC collects structured comments before voting. Snapshot measures sentiment off-chain. Onchain governance binds the consequence.
The process documents every decision. It links DeFi revenue, tokenomics and AAVE execution. It ensures traceability of amounts, cadence and accountability.
