Aave’s Token Buyback Plan Approved, AAVE Faces Price Struggles
Aavenomics, the highly anticipated proposal to modify Aave protocol's tokenomics and introduce token buybacks, has officially passed with overwhelming support from the Aave DAO.
This new phase for the protocol, led by Aave Chain Initiative (ACI) founder Marc Zeller, will see $1 million worth of AAVE tokens bought back every week, starting this Wednesday.
Aave DAO Passes the Aavenomics Proposal
On April 7, Marc Zeller announced on social media that the Aave DAO reached quorum for the Aavenomics proposal, securing more than 427,000 votes in favor, well beyond the required 320,000 votes. Only 2,000 votes were against the proposal. Zeller celebrated the move, stating:
“$AAVE aavenomics AIP now has quorum. Welcome to the new era for @aave. 1m$/week buybacks financed by protocol profits starting on Wednesday.”
Experimental Buyback Program
The token buyback plan is experimental and will initially run for six months. During this period, the Aave protocol will allocate part of its profits to buy $1 million worth of AAVE tokens each week. Given the recent dip in crypto asset prices, this means the protocol could purchase more tokens than anticipated, allowing it to reduce the circulating supply significantly. By the end of the year, Aave expects to have bought back 2.5% of AAVE’s total supply.
Zeller clarified that the six-month duration is just a pilot phase. The DAO intends for the buyback program to continue indefinitely, with the current $1 million per week rate being a conservative start. Zeller emphasized, “Buybacks are forever, the rate is just the one the DAO has voted for the next 6 months to start slow & at a conservative rate.”
Aave Remains a DeFi Leader Despite Market Decline
Despite the exciting news of the token buyback initiative, AAVE’s price fell 18% in the last 24 hours, dipping to $115 before recovering to $121. The price decline is contrary to what typically happens when buyback news is announced, as such initiatives are usually seen as positive for a token’s value by reducing its circulating supply and increasing buying pressure.
Aave remains one of the dominant DeFi protocols, with a total value locked (TVL) of around $20 billion and strong presence across multiple blockchains. The buyback strategy, if successful, may boost Aave’s value in the long run, but the token’s price is currently under pressure amidst a broader market downturn.
Kosta has reported on cryptocurrency markets and blockchain infrastructure since 2020, bringing over six years of hands-on experience in the crypto industry built through daily tracking of markets, trends, and emerging blockchain developments. Specializing in Bitcoin on-chain analysis, institutional ETF flows, and digital asset price action, his work at Coindoo has been cited by other news agencies and consistently covers market developments with a focus on data-driven reporting across Bitcoin, Ethereum, Solana, and XRP. Over the years, Kosta has contributed to multiple crypto media outlets in different regions, authoring over 6,000 articles across the sector. His reporting spans cryptocurrency markets and the broader fintech industry, tracking not only price action but also the technological and regulatory forces shaping the ecosystem. To support his analysis, Kosta actively leverages on-chain data and metrics from leading platforms such as Santiment, Glassnode, and CryptoQuant, enabling deeper, evidence-based market insights. He believes in the power of transparency and the data that underpins the blockchain ecosystem. His academic background in Marketing Management from Denmark further complements his analytical approach, adding a strong understanding of communication strategy and content positioning to his work.
