According to Cointelegraph, Aave's decentralized autonomous organization (DAO) has put forward a proposal to establish a long-term buyback program funded by the protocol. This initiative aims to utilize up to $50 million in annual revenue to repurchase Aave tokens, marking a significant shift in the platform's tokenomics. The proposal, introduced by the Aave Chan Initiative (ACI) on Wednesday, suggests making buybacks a permanent feature. The Aave Finance Committee (AFC) and TokenLogic are set to oversee the execution, with plans to repurchase between $250,000 and $1.75 million in Aave (AAVE) tokens weekly, contingent on market conditions, liquidity, and volatility.The proposal, if approved, will advance through the Aave Request for Comment (ARFC) stage to gather community feedback, followed by a Snapshot vote and final on-chain governance confirmation. Unlike short-term market interventions, this proposal seeks to institutionalize buybacks as a recurring mechanism, effectively positioning the DAO as an active capital allocator. The ACI highlighted that the program builds on the success of previous buyback initiatives, noting that in April, Aave's value surged by 13% following the community's approval of a $4 million token buyback.This $50 million buyback proposal follows an earlier initiative from October 17, which called for an immediate $20 million buyback to leverage the perceived undervaluation of the Aave token. The earlier plan argued that Aave's treasury had sufficient surplus cash to execute the buyback without affecting its operational expenses or reserves. While the $20 million plan was a short-term measure, the latest proposal aims to make buybacks perpetual, integrating them directly into the DAO's governance and treasury management. This move would transition Aave from opportunistic market reactions to a systematic, rule-based capital strategy, akin to corporate financial management.The proposed buyback framework is set against the backdrop of the upcoming Aave v4 upgrade, scheduled for the fourth quarter of 2025. This milestone is anticipated to redefine the protocol's economic and technical architecture, introducing a modular "hub and spoke" design. This design will enable customizable lending markets while pooling liquidity through "hubs," enhancing efficiency and scalability. Additionally, it will incorporate dynamic risk configurations to mitigate liquidation risks across multi-asset portfolios.
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