Aave (AAVE) Price Soars 21% as DAO Unveils "Most Important Proposal" in Its History

The price of AAVE has surged by an impressive 21% within 24 hours after Aave DAO unveiled what it describes as the “most important proposal” in its history.

The price of AAVE has surged by 21% in 24 hours after Aave DAO unveiled what it calls the “most important proposal” in its history.

This substantial price movement has far outperformed the broader cryptocurrency market, which saw just a 3.5% increase according to the CoinDesk 20 index.

Aave’s financial position has strengthened considerably over the past year. The platform now holds cash reserves of $115 million, marking a 115% increase since the middle of 2024.

This growing treasury demonstrates the platform’s expanding user base and increasing revenue streams. Another bright spot in Aave’s ecosystem is its native GHO stablecoin, which has reached a total supply of $200 million.

The stablecoin has become a key revenue generator for the protocol, contributing substantially to its overall financial health.

These strong financial metrics have positioned Aave to share more of its success with community members. The timing couldn’t be better as interest in sustainable DeFi platforms continues to grow among both retail and institutional investors.

The proposal was announced by Marc “Billy” Zeller on March 4.

“After half a decade of hard work, with the ACI, we’re proud to present the updated Aavenomics proposal to the Aave DAO,” wrote Zeller, highlighting the community effort behind the initiative.

This latest proposal builds upon a framework initially approved in August, now known as the “Aavenomics update.” It contains several mechanisms designed to enhance value for AAVE token holders while improving the overall user experience.

A central feature of the proposal is expanded profit sharing for AAVE stakers. The staking mechanism has long been popular among token holders looking for passive income opportunities, and the enhanced rewards aim to make this option even more attractive.

The proposal introduces a novel token called Anti-GHO, which cannot be traded but offers dual utility. Users can either burn it to eliminate GHO debt—effectively getting free loan forgiveness—or convert it to staked GHO (StkGHO) for additional yield opportunities.

The funding for Anti-GHO will come from 50% of GHO’s revenue stream, currently estimated at $6 million annually based on the stablecoin’s $12 million yearly revenue. This allocation shows the growing importance of GHO within Aave’s broader business strategy.

One of the most talked-about aspects of the proposal is a “buy and distribute” program that would allocate $1 million weekly to purchase AAVE tokens from open markets. This regular buying activity could provide steady support for token value while rewarding community members who hold for the long term.

According to the proposal, these buybacks could start right away with potential expansion after a six-month period. The proposal also addresses safety concerns through a new system called “Umbrella.”

This protection mechanism is designed to shield users from losses during market crashes or extreme volatility events. The DAO claims that “Aave will be the only protocol able to protect users from bad debt up to billions, as competitors have essentially given up on protecting their users.”

This focus on security could be especially appealing to institutional investors, who typically place high priority on risk management when exploring decentralized finance options. The proposal specifically mentions that this “unique advantage will make Aave even more attractive, especially for institutions concerned on-chain risks.”

The timing of these changes aligns with increasing demand for DeFi platforms that can balance innovation with financial responsibility. Aave’s healthy treasury puts it in a strong position to implement these changes without compromising its long-term stability.

Community feedback sessions are now open, allowing AAVE token holders and platform users to share their thoughts on the proposed changes. The DAO has indicated that a formal on-chain proposal will be presented for voting within the next few weeks.