Aave Introduces a New Proposal That Includes a Buy and Distribute Program

Aave has introduced a new proposal that includes a Buy and Distribute program to strengthen the AAVE token's value and liquidity.

Aave, the decentralized finance (DeFi) protocol, is introducing a new proposal that includes a Buy and Distribute program to strengthen the AAVE token’s value and liquidity.

As stated in a recent blog post, Aave will be buying back AAVE tokens every week to be used for the protocol’s ecosystem.

Aave’s proposal approved

The proposal, titled Aavenomics: Next Chapter, aims to introduce several key updates to the Aave ecosystem, including a new non-transferrable token called Anti-GHO.

This proposal follows the Aavenomics TEMP CHECK, which was designed to evaluate and implement key economic updates to Aave’s ecosystem.

The proposal, which was approved six months ago, was created to ensure Aave’s long-term sustainability by improving revenue distribution, optimizing incentives, and strengthening its treasury.

Since its approval, Aave has achieved several milestones. The protocol has increased its market share every quarter, remaining the lending platform with the highest revenue and expanding the supply of its stablecoin, GHO, beyond $200 million.

Aave’s proposal includes several other items such as Umbrella for user protection and Anti-GHO for revenue distribution.

The Buy and Distribute program will see Aave buying back AAVE tokens every week to be used for the protocol’s ecosystem.

The proposal explains that the protocol will be buying back $1 million worth of AAVE tokens every week. These purchased tokens will then be distributed in a way that supports the protocol.

This buyback approach helps in two key ways. First, it reduces the circulating supply of AAVE, which can support its price over time.

Second, it ensures that the protocol has a steady reserve of AAVE tokens, which can be used for incentives, governance, and maintaining liquidity in the ecosystem.

Aave also wants to close the long-running LEND to AAVE migration process, which allows users to convert their old LEND tokens into AAVE.

After nearly five years, any remaining unclaimed AAVE tokens—about $65 million—will be reclaimed and moved to Aave’s treasury.

This decision lessens the burden on Aave’s financial position by increasing its reserves. These funds can now be used for growth, security, or other governance-approved initiatives instead of remaining locked in an inactive migration contract.

Since the community had years to migrate their tokens, Aave believes it is fair to officially close this chapter and focus fully on the future of AOTE.

Furthermore, Aave plans to activate Umbrella on multiple networks, including Ethereum, Avalanche, Arbitrum, and Gnosis, to maximize its impact.

This new system will generate revenue for Aave as liquidity providers will be able to stake assets, securing funds within Aave for extended periods.

This ensures liquidity stability and prevents sudden market exits that could disrupt the protocol.

Additionally, this “committed liquidity” creates opportunities for new revenue streams, such as financing cross-chain positions and leveraging liquidity for third-party protocols.

The Anti-GHO model is a new non-transferrable token designed to reward AAVE and StkBPT stakers. It will replace the current GHO discount system and offer two key benefits.

Users can burn Anti-GHO at a 1:1 ratio against their GHO debt, reducing borrowing costs. Users can also convert Anti-GHO into StkGHO, making them eligible for additional staking rewards.

This system expands revenue-sharing opportunities, allowing all AAVE stakers—not just GHO borrowers—to benefit from protocol success. Initially, 50% of GHO revenue will be allocated to Anti-GHO rewards, with an estimated 6 million Anti-GHO tokens generated annually.

To manage treasury funds and optimize liquidity, Aave also wants to establish the Aave Finance Committee (AFC). This team will ensure funds are allocated efficiently, responding quickly to market conditions.