The Aave decentralized autonomous organization (DAO), which governs one of the largest decentralized finance (DeFi) lending platforms, has formalized an ongoing token buyback program by approving a proposal to allocate $50 million annually from its protocol revenue to repurchase AAVE tokens.
This decision was ratified unanimously on October 22, 2025, following a proposal introduced by the Aave Chan Initiative (ACI). The move permanently cements the buyback strategy as a key component of Aave’s broader economic model, known as Aavenomics, aimed at increasing token value and reinforcing the protocol’s treasury.
Aave continues to lead the DeFi sector, boasting a total value locked (TVL) of approximately $36.4 billion according to DeFiLlama data. Over the previous 30 days, the protocol has generated $12.7 million in revenue. Despite these strong metrics, the AAVE token experienced a market dip, trading around $200.54 at the time of reporting, reflecting a 10.9% decline in line with overall market trends.
Under the new permanent buyback framework, the Aave Finance Committee (AFC) and TokenLogic will conduct weekly purchases of AAVE tokens, with buybacks ranging between $250,000 and $1.75 million. The exact amounts will be contingent on weekly revenue outcomes and prevailing market conditions. The official proposal highlights the protocol’s consistent revenue generation and treasury expansion as justification for institutionalizing the buyback program beyond its initial term.
By embedding this mechanism into its fiscal strategy, Aave joins a select group of major DeFi projects utilizing sustainable, revenue-backed token repurchases. In addition, the AFC has been granted authorization to deploy the protocol’s wrapped Ether (wETH) and Bitcoin (BTC) reserves to support new growth and development initiatives within the ecosystem.
A recent analysis from WisdomTree Prime points out that other prominent protocols like Hyperliquid, Jito, and Lido are also exploring or implementing on-chain buybacks, underscoring a growing trend in DeFi governance.
This shift toward permanent token buyback programs is part of a wider industry movement toward increasing direct value returns to tokenholders. A report by investment firm Keyrock indicates that since 2024, the volume of on-chain token buybacks and direct revenue distributions has surged more than fivefold. On average, projects now return about 64% of their revenues directly to tokenholders, contrasting with earlier practices where revenue was primarily reinvested into product development, ecosystem incentives, and marketing efforts.
By adopting a strategy that emphasizes shareholder-like returns, Aave and similar DeFi platforms are increasingly mirroring traditional corporate financial models, prioritizing sustainable mechanisms to enhance token holder value over time.
