Aave DAO approved a plan to spend $50 million annually buying back AAVE, funded directly by DeFi fee income. The program began in April 2025 with weekly purchases and passed governance with 99.63% support, handing day-to-day execution to the Aave Finance Committee. The goal is to turn daily fee revenue into steady token demand that impacts every holder, staker, and treasury with AAVE exposure.
Aave DAO Proposes Permanent $500 Million Annual Buyback Program
The Aave ecosystem is considering a major step in its financial strategy. On October 22, 2025, the Aave Chan Initiative (ACI) submitted a governance proposal to establish a permanent, long-term program to buy back AAVE tokens. This plan aims to systematically use the protocol’s own revenue to create consistent demand for its token, moving beyond temporary measures to a structured capital allocation strategy.
The proposal outlines an annual budget of $50 million, sourced directly from the protocol’s earnings, to fund weekly buybacks. The execution would be flexible, with the Aave Finance Committee (AFC) and TokenLogic purchasing between $250,000 and $1.75 million worth of AAVE each week, adjusting for market conditions and revenue. This initiative is designed to enhance “Aavenomics” by creating steady buy pressure, optimizing the treasury, and supporting the token’s long-term value.
Building on Success and Looking Ahead
This ambitious plan builds on the demonstrated success of previous buyback efforts. In April 2025, the community approved a $4 million buyback, which was followed by a 13% surge in the price of AAVE. The new proposal seeks to transition from these short-term successes to a sustainable, rule-based system, similar to how traditional corporations manage share repurchases.
The timing of this proposal is strategic, as it comes just ahead of the anticipated Aave v4 upgrade, expected in the fourth quarter of 2025. This major upgrade promises to overhaul the protocol’s lending infrastructure with a more modular and scalable “hub and spoke” architecture. By cementing its buyback strategy now, Aave is positioning its ecosystem for greater financial strength and stability as it prepares for this significant technical evolution.
A Sing of a Maturing DeFi Ecosystem
This move by Aave is part of a broader trend in decentralized finance, where leading protocols with strong revenues are focusing on capital efficiency and value accrual for their tokenholders. The proposal is currently in the community feedback stage and, if it passes this initial phase, will move to a formal Snapshot vote for final approval by tokenholders . This process underscores the power of decentralized governance in shaping the economic future of a protocol.
