Aave DAO proposes $50 million annual token buyback program funded by protocol revenue

Aave DAO is weighing a proposal from the Aave Chan Initiative (ACI) — the DAO’s key service provider founded by Marc Zeller — to establish a $50 million annual AAVE token buyback program in a push to formalize the protocol’s existing buyback efforts.

Published on Wednesday, the plan outlines a strategy to embed buybacks as a permanent mechanism funded by Aave’s protocol revenue. The initiative aims to sustain long-term token value, optimize treasury reserves, and create consistent buy 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 stated, citing the success of Aave’s prior buyback campaign and the protocol’s strong revenue growth.

Under the plan, Aave’s Finance Committee (AFC) and TokenLogic would jointly execute the buybacks, purchasing between $250,000 and $1.75 million worth of AAVE weekly. Furthermore, the proposal allows for flexibility in adjusting based on market conditions and available protocol revenue. The ACI’s pitch also empowers the AFC to leverage BTC and ETH reserves for future growth initiatives, including collateralized debt creation and yield-bearing conversions.

Decentralized finance has experienced a broader wave of buyback activity across major protocols as they reintroduce capital efficiency and token value capture into their designs.

A recent report from The Block Research found that Aave and Uniswap have led a DeFi fee rebound to $600 million, with projects like Pump.fun and Raydium adopting similar token buyback frameworks too. 

Aave has remained one of the sector’s strongest performers, recently surpassing $25 billion in outstanding loans while expanding into new institutional lending avenues. Recently, DeFi’s largest lender launched Horizon, a platform for stablecoin borrowing against tokenized real-world assets and its first non-EVM deployment on Aptos. Aave is also starting to integrate Maple Finance’s yield-bearing assets as a new type of collateral.

As of this month, Aave ranks second among DeFi protocols in monthly fees, according to The Block’s data dashboard. AAVE prices were down over 3% in the last 24 hours amid a general market downturn.