Aave Chan Initiative (ACI) Update

Aave Chan Initiative (ACI) founder Marc ZELLER has announced that a proposal to upgrade Aave protocol’s tokenomics has passed a quorum. In a post on X, he noted that Aavenomics could begin implementation this month.

Aavenomics is a governance proposal aiming to change Aave’s tokenomics to implement fee switching, allowing the protocol to share a portion of its revenue with ecosystem participants.

Buy & Distribute Plan

Through the Buy & Distribute plan, the finance committee would buy back $1 million worth of AAVE tokens weekly for six months using the protocol’s excess revenue and distribute them to Aave users who have staked or locked their tokens.

According to a screenshot provided by Zeller, the proposal received over 813,000 votes in favor and fewer than three votes against. Following its passage, the next step is the Aave Improvement Proposal (AIP), which the DAO will need to vote on for the feature to be fully launched.

Market Impact

Despite the announcement of a potential token buyback and an upcoming major tokenomics change, the AAVE token fell nearly 1% on March 18. This decline reflects a tough year for the token, which is down 47% year-to-date and more than 50% over the last 90 days according to CoinMarketCap. The weak performance is attributed to the overall crypto market downturn affecting altcoins significantly; in comparison, AAVE has fallen 42% in the last 90 days and 22% in the last 30 days.

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