The Aave DAO has unveiled a proposal to implement a long-term token buyback program worth up to $50 million, funded by the protocol’s revenue. The initiative aims to make token repurchases a core feature of Aave’s tokenomics, setting the stage for the upcoming Aave v4 launch in late 2025.
According to the proposal submitted by the Aave Chan Initiative (ACI), weekly buybacks would range from $250,000 to $1.75 million, depending on market liquidity and volatility. The plan seeks to transform Aave DAO into a more active capital manager, using its treasury funds to create sustained demand for the AAVE token.
Managed by Aave Financial Committee and TokenLogic
The buyback operations will be overseen by the Aave Financial Committee (AFC) in collaboration with TokenLogic, which will assess weekly market conditions and determine optimal buyback volumes.
Before implementation, the proposal will go through the DAO’s decentralized governance process, which includes three major stages:
- Aave Request for Comment (ARFC): community discussion and feedback phase;
- Off-chain voting: a gas-free poll where token holders can express their stance;
- On-chain governance vote: the final decision stage that activates the proposal on the blockchain.
From One-Off Buys to a Systematic Treasury Strategy
Unlike one-time buyback events, this initiative introduces a structured, recurring model for treasury management. ACI noted that a similar short-term buyback earlier in 2025 led to a 13% surge in AAVE’s price following a $4 million repurchase approved by the community.
This new plan expands upon that success by embedding the mechanism directly into the DAO’s financial framework. The program replaces previous ad-hoc interventions—such as the $20 million one-time buyback—with a consistent, data-driven approach.
Strengthening Tokenomics and Investor Confidence
Proponents argue that the initiative will enhance trust in Aave’s tokenomics and create a sustainable market for the AAVE token. The move also aligns with Aave v4’s roadmap, which introduces a modular liquidity hub architecture designed to improve flexibility, risk management, and interoperability across multiple assets.
The timing appears strategic, as Aave prepares for major upgrades and the rollout of Horizon, a lending platform focused on stablecoin-backed real-world assets (RWAs).
If approved, the weekly buyback initiative would mark one of the most ambitious long-term DeFi treasury strategies to date, signaling a maturing phase for decentralized governance and protocol-owned liquidity.
