Aave’s Token Buyback Plan Approved, AAVE Faces Price Struggles

This new phase for the protocol, led by Aave Chain Initiative (ACI) founder Marc Zeller, will see $1 million worth of AAVE tokens bought back every week, starting this Wednesday.

Aave DAO Passes the Aavenomics Proposal

On April 7, Marc Zeller announced on social media that the Aave DAO reached quorum for the Aavenomics proposal, securing more than 427,000 votes in favor, well beyond the required 320,000 votes. Only 2,000 votes were against the proposal. Zeller celebrated the move, stating:

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

Experimental Buyback Program

The token buyback plan is experimental and will initially run for six months. During this period, the Aave protocol will allocate part of its profits to buy $1 million worth of AAVE tokens each week. Given the recent dip in crypto asset prices, this means the protocol could purchase more tokens than anticipated, allowing it to reduce the circulating supply significantly. By the end of the year, Aave expects to have bought back 2.5% of AAVE’s total supply.

READ MORE:

Gold Price Prediction for 2025 and 2026 from Deutsche Bank

Zeller clarified that the six-month duration is just a pilot phase. The DAO intends for the buyback program to continue indefinitely, with the current $1 million per week rate being a conservative start. Zeller emphasized, “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 a DeFi Leader Despite Market Decline

Despite the exciting news of the token buyback initiative, AAVE’s price fell 18% in the last 24 hours, dipping to $115 before recovering to $121. The price decline is contrary to what typically happens when buyback news is announced, as such initiatives are usually seen as positive for a token’s value by reducing its circulating supply and increasing buying pressure.

Aave remains one of the dominant DeFi protocols, with a total value locked (TVL) of around $20 billion and strong presence across multiple blockchains. The buyback strategy, if successful, may boost Aave’s value in the long run, but the token’s price is currently under pressure amidst a broader market downturn.

The post Aave’s Token Buyback Plan Approved, AAVE Faces Price Struggles appeared first on Coindoo.