Aave Chan Initiative Proposes Revamp of Aave Tokenomics

Aave Chan Initiative (ACI) founder Marc Zeller stated that the proposal to revamp the Aave protocol tokenomics has passed quorum. Implementation of the Aavenomics could start this month.

Aavenomics is a governance proposal aiming to modify Aave tokenomics to implement a fee switch, enabling the protocol to share part of its revenue with ecosystem participants. Those who stake AAVE tokens will receive rewards in AAVE through a buyback program.


Through the Buy & Distribute plan, a finance committee will buy back $1 million AAVE tokens weekly for six months using the protocol’s excess revenue. These tokens will then be distributed to Aave users who have staked or locked their tokens.

Community support has surged since the initial proposal, with Aave co-founder Stani Kulechov describing it as a “fee switch on steroids.” Zeller called it the most significant proposal in ACI history, a journey that took half a decade.

This support is apparent with approximately 100% of votes favoring the proposal. According to Zeller, there were over 813,000 votes in support, with less than three votes against. Now that the proposal has passed, the next step is the Aave Improvement Proposal (AIP), which the DAO must also vote on to fully launch the feature.


Zeller mentioned:
> “If the implementation, review & AIP vote is done on time, AAVE buybacks will likely start this month.”

The substantial backing for the snapshot vote indicates the proposal will become active soon, with many believing the $1 million weekly buyback will create constant demand, potentially boosting AAVE’s price.

AAVE Token Down Nearly 50% Despite Positive Developments

These developments further enhance the narrative surrounding the Aave protocol, which has seen success dating back to 2024. Aave has grown to be the largest DeFi protocol with a total value locked (TVL) of $17.386 billion. The latest move includes integrating Aave V3 with the mobile-first blockchain Celo, expanding Aave V3’s reach across seven blockchain networks, including Ethereum, Aptos, Polygon, Avalanche, and Arbitrum.

Despite the potential token buyback and a significant tokenomics overhaul, the AAVE token has decreased almost 1% today, reflecting its challenging year. According to CoinMarketCap, the token is down 47% year-to-date and has seen over a 50% decline in the last 90 days.

This downturn correlates with a broader decline in the crypto market, adversely affecting altcoins. Compared to Bitcoin, AAVE has fallen 42% in the last 90 days and 22% over 30 days.

Nonetheless, AAVE is positioned better than last year, showing a 37% increase in value compared to the previous year. Many believe it is set for a bull run when positive market sentiment returns.