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Aave DAO proposes a $50M annual buyback plan using DeFi revenues, making token repurchases a permanent part of the protocol’s tokenomics.
Author: Akshat Thakur
October 21, 2025 – The Aave DAO has introduced a proposal to establish a long-term buyback program allocating up to $50 million annually from protocol revenues to repurchase AAVE tokens. The initiative, led by the Aave Chan Initiative (ACI), would institutionalize token buybacks as a recurring feature of Aave’s governance model, signaling a maturing approach to capital management within decentralized finance (DeFi).
The proposal suggests using surplus treasury funds to purchase AAVE tokens weekly, ranging from $250,000 to $1.75 million, depending on market conditions, liquidity, and volatility.
If approved, it would proceed through the Aave Request for Comment (ARFC) process for community review, followed by a Snapshot vote and final onchain governance confirmation.
Unlike temporary buybacks, this program embeds recurring repurchases into the DAO’s core treasury policy, transforming Aave into a systematic capital allocator rather than a reactive market participant.
Earlier in October, Aave considered a $20 million immediate buyback aimed at capturing undervaluation in its token price. That plan was intended as a short-term response to market conditions.
The new $50 million framework, however, makes the process permanent and rules-based, ensuring that capital deployment follows structured financial discipline rather than ad hoc decisions.
This approach mirrors traditional corporate treasury management while preserving DAO transparency and community oversight.
The timing coincides with the anticipated Aave v4 upgrade, expected to launch in Q4 2025.
The upgrade introduces a modular “hub and spoke” architecture that allows for customized lending markets, improved liquidity efficiency, and advanced risk configurations.
By coupling financial optimization with technological progress, Aave Dao aims to strengthen its long-term DeFi leadership and enhance tokenholder value.
Community sentiment has been largely positive, with users praising Aave’s shift toward structured treasury management. Analysts note that a consistent buyback mechanism could reduce volatility and signal strong governance maturity in DeFi.
As of press time, AAVE trades at $220.85, maintaining steady momentum ahead of the v4 release. The buyback program, if approved, could create a sustainable demand floor while reinforcing Aave’s reputation as a leading decentralized lending protocol.
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