Quick take:
- The DAO said the program creates consistent buy pressure for AAVE tokens using protocol revenue.
- It also optimizes the treasury by converting idle assets into productive capital, thus supporting ecosystem growth financed by debt.
- The program takes an adaptive execution strategy based on market conditions, with a weekly range of $250,000 – $1,750,000 AAVE purchases.
Aave DAO, the non-profit organisation that runs Aave Protocol, is proposing an annual budget of $50 million for the AAVE buyback program.
The new budget extends the existing program indefinitely and features flexible execution parameters, enabling strategic capital deployment by the Aave DAO to further accumulate AAVE tokens.
According to the documentation published on the governance section of the Aave website, the DAO believes the program creates consistent buy pressure for AAVE tokens using protocol revenue.
It also optimizes the treasury by converting idle assets into productive capital, thus supporting ecosystem growth financed by debt, the organisation wrote in a statement, adding that, adding that the program will take an adaptive execution strategy based on market conditions, with a weekly range of $250,000 – $1,750,000 AAVE purchases.
“The [Aave Finance Committee] will have the mandate to operate AAVE, wBTC, and wETH reserves to support growth initiatives by debt creation,” the DAO said. “The proposal [also] gives mandate to the AFC to mobilize currently unstaked wETH from the frontier program to finance growth initiatives as collateral.”
According to DeFiLlama data, the Aave protocol generated over $1.2 billion in annualized fees, while annualized revenue stands at $166 million. The protocol’s total value locked recently reached an all-time high of $45.76 billion.
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