Aave Kicks off a $50M Token Buyback Initiative to Reduce Circulating Supply

Aave, one of the most prominent DeFi protocols, has kickstarted a $50 million token buyback initiative—an aggressive move aimed at reducing the circulating supply of AAVE

Aave, one of the most prominent DeFi protocols, has embarked on a $50 million token buyback initiative in 2024. This move is designed to reduce the circulating supply of AAVE and potentially reinvigorate market sentiment.

As the buyback strategy unfolds, investor behavior is already responding. Data from multiple sources indicates increased accumulation and liquidity trends, which could be setting the stage for the next leg of Aave’s market recovery.

Aave to Buyback $1 Million Weekly in AAVE Tokens

According to official data, Aave has set aside $1 million to purchase AAVE tokens each week throughout 2024, with a total of up to $50 million earmarked for the entire year. The buyback program began earlier in April, and so far, the team has already acquired over 10,000 AAVE tokens at an average price of $139.

These repurchases are part of a broader change in Aave’s fee structure, aiming to direct more protocol revenue toward community and token health.

By buying back tokens, Aave effectively reduces the active supply of AAVE in the market, ultimately increasing scarcity. In both traditional finance and the crypto world, such mechanisms have often served as bullish catalysts, especially when paired with steady or growing demand.

Investor Confidence Rising: Spot Activity Surges, Holdings Move to Cold Wallets

In response to the buyback initiative and the protocol’s improving fundamentals, investor activity on the spot market has seen a notable uptick. Over the last week, about $13.98 million worth of AAVE has changed hands, and in the past 24 hours alone, there has been fresh trading volume of $4.3 million.

More importantly, a portion of these purchases appears to be long-term holdings moved into cold wallets or directly deposited into Aave’s liquidity pools. This suggests that investors are positioning for potential gains ahead, driven by renewed confidence in the protocol’s fundamentals.

Technical Analysis: Symmetrical Triangle Breakout Could Push AAVE Toward $170

From a technical analysis perspective, AAVE is now trading within a symmetrical triangle pattern—a structure formed by converging support and resistance levels, usually leading to a breakout when volume picks up.

At press time, AAVE was priced at $143, having fallen 0.39% over the past 24 hours and remaining nearly flat on the week.

At press time, the 24-hour RSI reading was 44.64, indicating that the token was in oversold territory. However, the MACD line was above the signal line, suggesting that the bullish momentum was still intact.

If AAVE breaks out above the triangle’s upper boundary, analysts at TradingView expect the next resistance level to be at $170, followed by the $187 range in the short term. If momentum continues building, it could even revisit the $200 zone—a level it hasn’t seen since early 2023.

Liquidity Injection Points to Broader Confidence

Apart from individual accumulation, Aave’s Total Value Locked (TVL) has seen a noteworthy increase. As of now, Aave boasts a TVL of $18.03 billion, a peak not seen since early April.

The TVL metric is widely used to gauge the health and adoption of DeFi platforms. A growing TVL often correlates with strong community engagement, heightened protocol utility, and improved investor sentiment—all positive indicators for price performance.

What’s Fueling the Optimism Beyond the Buyback

While the buyback program is at the forefront, it’s not the only reason for the optimistic outlook. Aave has been busy rolling out features and potential expansions designed to attract more liquidity and use cases. Among the recent developments are high-yield offerings for EUR-denominated stablecoins and the planned deployment on Aptos—a Layer 1 blockchain aiming to scale Web3 applications.

Together, these advancements signal that Aave isn’t merely relying on tokenomics to drive value. Instead, it’s pursuing a comprehensive strategy to expand utility, increase user engagement, and enhance financial incentives for both users and liquidity providers.