Aave’s tokenholders permitted a governance proposal to start searching for once more the decentralized finance (DeFi) protocol’s governance token, AAVE, as part of a broader tokenomics overhaul, Aave acknowledged on April 9.
The proposal — which was permitted by larger than 99% of AAVE tokenholders — permits the protocol to purchase $4 million in AAVE (AAVE) tokens, adequate for one month of buybacks.
The switch is a “first step” in the direction of a broader plan to repurchase $1 million AAVE tokens weekly for six months. It may also be the newest event of DeFi protocols implementing buyback mechanisms in response to tokenholder requires.
“The goal is to sustainably increase AAVE acquisition from the open market and distribute it to the Ecosystem Reserve,” the proposal acknowledged.
The AAVE token’s worth rallied larger than 13% on April 9, bringing the protocol’s market capitalization to larger than $2.1 billion, in accordance with data from CoinGecko.
The buyback proposal handed with overwhelming assist. Source: Aave
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Buybacks obtain recognition
In March, the Aave Chan Initiative (ACI), a governance advisory group, proposed a tokenomics revamp that will include new earnings allocations for AAVE tokenholders, enhanced safety choices for patrons, and the creation of an “Aave Finance Committee.”
Aave is Web3’s hottest DeFi protocol, with full value locked surpassing $17.5 billion as of April 9, according to DefiLlama.
It may also be amongst DeFi’s largest fee generators, with an estimated annualized fee income of $350 million, the data reveals.
Aave is DeFi’s hottest protocol by TVL. Source: DeFILlama
DeFi protocols are beneath rising stress to supply tokenholders with a share of protocol revenues — partly because of US President Donald Trump has fostered a friendlier regulatory environment for DeFi protocols throughout the United States.
Projects along with Ethena, Ether.fi and Maple are piloting value-accrual mechanisms for his or her native tokens.
In January, Maple Finance’s group floated buying back native SYRUP tokens and distributing them as rewards to stakers.
In December, Ether.fi, a liquid restaking token issuer, tipped plans to direct 5% of protocol revenues in the direction of searching for once more native ETHFI tokens.
Similarly, Ethena, a yield-bearing stablecoin issuer, agreed to share a number of of its roughly $200 million in protocol revenues with tokenholders in November.
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