Aave’s $1 million token buyback plan could go live this month pending final steps

Aave Chan Initiative (ACI) founder Marc Zeller, has said that the proposal to revamp the Aave protocol tokenomics has passed the quorum. In a post on X, he noted that implementation of the Aavenomics could start this month.

Aavenomics is a governance proposal to modify Aave tokenomics so that the protocol will implement a fee switch. This will allow the protocol to share part of its revenue with ecosystem participants. Under the proposal, those who staked AAVE tokens will get rewards in AAVE through a buyback program.

Aavenomics as proposed by ACI (Source: Aave DAO)

Through the Buy & Distribute, a finance committee will buy back $1 million AAVE tokens weekly for six months using the protocol’s excess revenue and distribute them to Aave users who have staked or locked their tokens.

Community support has followed Aavenomics since its initial proposal, with Aave co-founder Stani Kulechov describing it as a “fee switch on steroids.” Zeller also called it the most important proposal in ACI history, noting that it took half a decade.

That community support remains evident, with approximately 100% of votes in support of the proposal. Per the screenshot shared by Zeller, there were over 813,000 votes in support and less than three votes against it. With it now passed, the next step is an Aave Improvement Proposal (AIP), which the DAO will also have to vote on for the feature to fully launch.

Aavenomics implementation got overwhelming support from Aave DAO (Source: Marc Zeller)

Zeller said :

“If the implementation, review & AIP vote is done on time, SAAVE buybacks will likely start this month.”

Meanwhile, the overwhelming support for the snapshot vote solidifies the expectations the proposal could become active soon. Many expect this to have a massive impact on AAVE value, noting that the $1 million weekly buyback creates a constant demand pressure for the token, which could boost its price.

AAVE token down almost 50% despite positive developments

The news adds to the growing list of positive developments on the Aave protocol dating back to 2024. Over the past few years, Aave has grown to become the biggest DeFi protocol with total value locked (TVL) of $17.386 billion. The lending protocol has continued to grow with its latest move being the integration of Aave V3 on mobile-first blokchain Celo.

Its launch on Celo means that Aave V3 which launched in March 2022 is already on seven blockchain networks including Ethereum, Aptos, Polygon, Avalanche, and Arbitrum.

Despite the news of potential token buyback and upcoming approval of a massive tokenomics change, AAVE token is down almost 1% today, highlighting what has been a rough year for the token. According to CoinMarketCap, the token is down 47% year-to-date and has even seen over 50% decline in the last 90 days.

Its poor performance appears to be connected to the overall drawdown in the crypto market, which has had a bigger impact on altcoins. When compared to Bitcoin, AAVE is down 42% in the last 90 days and 22% in 30 days.

Nevertheless, AAVE is still in a far better position compared to last year. The token is up 37% compared to its price last year and many believe it positioned for a bull run when the positive sentiment returns to the market.

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