In a recent development, the Aave Decentralized Autonomous Organization (DAO) has officially given the green light for a $4 million buyback plan of AAVE tokens. Garnering a remarkable 99.63% consensus, the proposal empowers the Aave Finance Committee to commence the purchasing of AAVE tokens on the open market. This batch of tokens will subsequently be allocated to the protocol’s Ecosystem Reserve.
The Aave Finance Committee, backed by governance, has been instituted to manage Aave’s treasury and financial operations. This initial phase of the buyback program is projected to span one month. If it proves successful, it could evolve into a six-month initiative with up to $1 million in weekly purchases. This phased strategy ensures cautious deployment of treasury funds, while simultaneously enabling Aave to start reclaiming its own tokens from the secondary market, thereby strengthening the ecosystem’s value.
Marc Zeller, founder of the Aave Chan Initiative, stated, “While staying extremely conservative with Aave treasury funds, the ACI considers this proposal can mandate the AFC to start an AAVE buyback and distribute program immediately at the pace of $1M/week for the first 6 months of the mandate.”
Zeller also suggested that the six-month timeline could be extended if the program performs well. Drawing parallels to previous initiatives like Merit which surpassed its initial six-month projection, he reassured that a similar extension is likely if the buybacks initiative delivers.
“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. Just like Merit, we started for 6 months and now we are celebrating 16th Month of the program, it will get renewed,” Zeller further added.
The buyback initiative is a part of a comprehensive proposal introduced by Zeller and ACI on March 4. Termed the Aavenomics upgrade, the plan encompasses several new implementations, including Umbrella, a risk mitigation and liquidity management system intended to preclude damaging bank runs and optimize capital efficiency; Anti-GHO, a non-transferable rewards token designed to enhance incentives for GHO stablecoin users and stakers; and LEND Deprecation, the final step in the migration from Aave’s original governance token, LEND, to AAVE, which would recoup roughly $65 million in unclaimed tokens for future use.
As technical development and audits progress, the community will continue to vote on future segments of the plan. In a post on X, Zeller hailed the move as a “major milestone” and dubbed the overall plan as “the most important proposal in Aave’s history.”
After five years of diligent work with the ACI, the updated Aavenomics proposal has been presented to the Aave DAO. The proposal has been hailed as the most significant in Aave’s history, and the community is encouraged to read and provide feedback.
