Aave's decentralized autonomous organization (DAO) has introduced a proposal to create a long-term, protocol-funded buyback program that would use up to $50 million in annual revenue to repurchase Aave tokens.
The proposal, submitted Wednesday by the Aave Chan Initiative (ACI), seeks to make buybacks a permanent component of Aave’s tokenomics. Under the plan, the Aave Finance Committee (AFC) and TokenLogic would lead the execution, repurchasing $250,000 to $1.75 million in Aave (AAVE) tokens weekly, depending on market conditions, liquidity and volatility.
If approved, the proposal will proceed through the Aave Request for Comment (ARFC) stage for community feedback, followed by a Snapshot vote and final onchain governance confirmation. Unlike short-term market interventions, the proposal aims to institutionalize buybacks as a recurring mechanism, essentially making the DAO an active capital allocator.
The ACI said the program builds on the success of other buyback initiatives. In April, Aave soared by 13% as 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 Oct. 17, which called for an immediate $20 million buyback to capitalize on the Aave token’s undervaluation.
The earlier plan positioned the token as significantly underpriced relative to its fundamentals.
It argued that Aave’s treasury had enough surplus cash to execute the buyback without compromising its operational expenses or reserves.
While the $20 million plan was designed as a short-term measure, the latest proposal seeks to make buybacks perpetual, embedding them directly into the DAO’s governance and treasury management. The move would shift Aave from opportunistic market reactions toward a systematic, rule-based capital strategy, echoing corporate-style financial management.
Aave’s Buyback Push Comes Ahead of v4 Upgrade
The proposed buyback framework comes ahead of the upcoming Aave v4 upgrade slated for the fourth quarter of 2025.
The milestone is expected to redefine the protocol’s economic and technical architecture, introducing a modular “hub and spoke” design.
This will allow customizable lending markets while pooling liquidity through “hubs,” improving efficiency and scalability.
It will also add dynamic risk configurations, which reduce liquidation risks across multi-asset portfolios.