Aave’s $1M Token Buyback Plan Could Happen This Month

Anna Martynova

Aave Chan Initiative (ACI) founder Marc ZELLER has announced that a proposal to upgrade the Aave protocol’s tokenomics has passed a quorum. In a post on X, he noted that Aavenomics could begin implementation this month. Aavenomics is a governance proposal to change Aave’s tokenomics so that the protocol implements fee switching. This would allow the protocol to share a portion of its revenue with ecosystem participants.

Through Buy & Distribute, the finance committee would buy back $1 million worth of AAVE tokens weekly for six months using the protocol’s excess revenue and distribute them to Aave users who have staked or locked their tokens. According to a screenshot provided by Zeller, there were over 813,000 votes in favor and fewer than three votes against the proposal. Now that it has been passed, the next step is the Aave Improvement Proposal (AIP), which the DAO will also need to vote on for the feature to be fully launched.

Despite news of a potential token buyback and the upcoming approval of a major tokenomics change, the AAVE token fell nearly 1% on March 18, highlighting that it has been a tough year for the token. According to CoinMarketCap, the token is down 47% year-to-date and has fallen more than 50% in the last 90 days. The weak performance appears to be related to the overall crypto market downturn, which has had a greater impact on altcoins. Compared to Bitcoin, AAVE has fallen 42% in the last 90 days and 22% in 30 days.

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