Aave DAO approves $1 million weekly buyback as part of new tokenomics plan

Aavenomics, the proposal to modify Aave protocol tokenomics and introduce token buybacks, has achieved a quorum for the Aave DAO. Aave Chain Initiative (ACI) founder Marc Zeller announced this on X, noting that it marks a new era for the protocol.

According to Zeller, the $1 million per week of AAVE token buyback will start on Wednesday after most Aave DAO members voted overwhelmingly in favor of the proposal. Over 427,000 votes were cast in support of the proposal, more than the required 320,000 votes, while only 2,000 votes were against

Aavenomics buyback proposal passes. Source: Marc Zeller on X

He said:

“The $AAVE aavenomics AIP now has quorum. Welcome to the new era for @aave. 1m$/week buybacks financed by protocol profits starting on Wednesday.”

Aave DAO buyback is experimental at first

The news has been greeted with excitement in the Aave community, with one user noting that the timing could not have been better given that the prices of crypto assets have fallen. This would mean that the amount of AAVE tokens to be bought with $1 million would be higher.

Over six months, Aave will spend part of its profits to buy $1 million worth of AAVE tokens weekly. Based on AAVE’s current price and buyback, the Aave DAO would have bought back 2.5% of the supply by the end of the year.

Meanwhile, Zeller noted that the six months are just the pilot phase of the buyback program, as the intention is to make the buyback last forever. The Aave DAO only voted for $1 million for six months to keep the rate low initially, and the program will likely be renewed after six months.

He said:

“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 the leading DeFi protocol with around $20 billion in total value locked (TVL) and dominating across multiple chains.

AAVE plunges amidst the general market decline

Despite the positive news of a token buyback for AAVE, the token fell 18% in the last 24 hours, according to CoinMarketCap. This was enough to send it crashing to $115, although it has now recovered to $121.

This is contrary to what usually happens when news like this breaks. Generally, buyback is a positive indicator as it means that there will be constant buying pressure for the token, and the circulating supply will also reduce.

However, general market struggles, mostly due to the international trade wars between the US and other countries, have nuked the entire crypto market in the last 24 hours, with Bitcoin crashing to $74,000; Aave has not been spared.

The plunge in AAVE value continues what has been a rough year for the token, during which it lost 62.22% of its value. AAVE started 2025 trading around $308, but market uncertainties and the general struggles of the crypto market have caused the token to shed more than half of this value. In the last 30 days alone, it has fallen 34%.

Nevertheless, the Aave community remains bullish. Zeller noted that the liquidation resulting from today’s market crash resulted in around $0.5 million in profits for the Aave. The Aave DAO also holds $100 million in cash, with 70% of it in stablecoins.

Source