Aave DAO proposes an annual token buyback of $50 million using DeFi revenue, with the aim of making buybacks a permanent part of its strategy.
Aave DAO has submitted a new proposal to launch an ongoing token buyback program using $50 million annually of its DeFi revenue. The plan seeks to formalize token buybacks as part of the DAO’s capital strategy and expand on previous successful initiatives.
Aave proposes weekly token buybacks funded by the protocol
The proposal, submitted by the Aave Chan Initiative (ACI), recommends using protocol revenue to buy back AAVE tokens on a weekly basis. The buyback amount ranges between $250,000 and $1.75 million, depending on market liquidity, volatility, and conditions.
We have published a governance proposal to institutionalize the AAVE repurchase program for the long term.
The AAVE DAO economy is stronger than ever.
Just use Aave. pic.twitter.com/KHpW3ajPeR
— Mark “七十 Billy” Zeller 👻 🦇🔊 (@lemiscate) October 22, 2025
The plan aims to make buybacks a long-term strategy and not a temporary response to market movements. The proposal will go through Aave’s Request for Comment (ARFC) stage for community input. After that, it will go to quick voting and confirmation of onchain management.
Implementation will be handled by the Aave Financial Commission (AFC) in partnership with TokenLogic. This approach reflects how corporate coffers allocate capital while keeping the process transparent and rules-based.
Expanding the previous $20 million proposal
This new $50 million plan builds on a previous short-term proposal introduced earlier in the month. This plan proposed a $20 million buyback to take advantage of the decline in the value of the existing token.
The previous proposal said Aave’s treasury had enough surplus funds to move forward without impacting operations or reserves. It was framed as a temporary move to support price stability and investor confidence.
Now, with the new proposal, Aave aims to make buybacks a permanent part of its token economies. This represents a shift from one-time actions to a consistent strategy governed by the DAO.
In April, a similar $4 million buyback caused the price of the AAVE token to increase by 13%, demonstrating previous community support for this approach.
The repurchase suggestion comes before the Aave v4 upgrade
Proposal It also arrives as Aave prepares for an upgrade to its v4 protocol, which is expected in Q4 2025. This update will introduce technical improvements, including a modular “hub-and-spoke” design.
The new architecture will allow for the allocation of lending markets while pooling liquidity more efficiently through positions. It will also include features such as dynamic risk configurations to better manage liquidation risk.
These technical upgrades are intended to improve performance, flexibility, and security across the protocol. A buyback plan may enable Aave to increase long-term value along with these system updates.