Aave’s Decentralized Autonomous Organization (DAO) has presented a proposal to create a long-term protocol-funded buyback program that would use up to $50 million in annual revenue to buy back Aave tokens.
The proposal, submitted Wednesday by the Aave Chan Initiative (ACI), aims to make buybacks a permanent component of Aave’s tokenomics. Under the plan, the Aave Finance Committee (AFC) and TokenLogic would lead execution, repurchasing between $250,000 and $1.75 million worth of Aave (AAVE) tokens each week, depending on market conditions, liquidity, and volatility.
If approved, the proposal will go through the Aave Request for Comments (ARFC) stage to get community feedback, followed by instant voting and final on-chain governance confirmation. Unlike short-term market interventions, the proposal aims to institutionalize buybacks as a recurring mechanism, essentially making the DAO an active allocator of capital.
ACI said the program builds on the success of other buyout initiatives. In April, Aave soared 13% when the community approved a $4 million token buyback.
Buyback plan expands on previous proposals
The $50 million buyback proposal follows an earlier initiative proposed on Friday, which called for an immediate $20 million buyback to capitalize on the undervaluation of the Aave token.
The previous plan positioned the token as significantly undervalued relative to its fundamentals.
He argued that Aave’s treasury had sufficient excess liquidity to execute the buyout without compromising its operational expenses or reserves.
While the $20 million plan was designed as a short-term measure, the latest proposal aims to make buybacks perpetual, integrating them directly into the DAO’s governance and treasury management. The move would shift Aave from opportunistic market reactions to a systematic, rules-based capital strategy, echoing enterprise-style financial management.
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Aave buyback campaign ahead of v4 upgrade
The proposed buyback framework comes ahead of the upcoming Aave v4 upgrade scheduled for Q4 2025.
This step should redefine the economic and technical architecture of the protocol, by introducing a modular “star” design.
This will enable customization of lending markets while pooling liquidity through “hubs”, improving efficiency and scalability.
It will also add dynamic risk configurations, which will reduce liquidation risks in multi-asset portfolios.
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