Aave Kickstarts Buyback Program, Here’s the Possible Impact on Price

Key Notes

• Aave initiated $1 million weekly token buybacks as part of its new revenue model.
• Repurchased tokens will be redistributed to stakers as a new incentive push.
• Analysts see the move as a support mechanism for AAVE’s price.

Aave, a leading decentralized non-custodial and lending protocol, has launched a token buyback program, sparking excitement in the community.

Following the start of the campaign, the protocol will repurchase $1 million worth of AAVE tokens every week. According to the update, these tokens will be distributed to stakers as part of the initiative.

Aave Begins Weekly Token Buybacks

Aave officially kicked off its token repurchase initiative. The project confirmed it will buy back $1 million worth of AAVE tokens weekly over the next six months. This adds up to over $50 million in buybacks on an annualized basis.

Based on the update, these repurchased tokens will be redistributed to AAVE stakers. It will give them a direct reward from protocol revenue.

It is worth mentioning that this buyback program is part of a larger shift known as the fee switch. This mechanism allows Aave to redirect some of its protocol revenue toward buying back its native token.

AAVE Buybacks have officially started || @aave

For months we have been highlighting Aave’s fee switch as one of the most significant catalysts.

Last week, the project officially started to buy back $AAVE tokens, which will then be redistributed to $AAVE stakers.

▫️Program… pic.twitter.com/1sYB98TcPK

— GLC (@GLC_Research) April 18, 2025

Since the announcement on social media, supporters and proponents of the project have popularized the idea that this is one of the most significant updates in Aave’s history.

According to the update, the long-term plan is to increase the size of the weekly buybacks. As the protocol’s revenue grows, so will its ability to buy back more tokens. Aave expects a boost in protocol income through various sources starting in 2025.

One major contributor is the recently announced partnership with Chainlink for Smart Vault Revenue (SVR). This deal could help Aave capture up to $10 million in revenue from MEV (Miner Extractable Value) during liquidations.

Other growth drivers include GHO and Aave’s stablecoin, which is expected to become profitable and sustainable by next year. The protocol is also launching Horizon, a new offering focused on Real-World Assets (RWAs). These initiatives point to a broader plan to diversify revenue streams and improve token holder rewards.

While commenting on the launch, Aave’s founder, Stani Kulechov, said this move is part of a wider expansion. He listed Aave V4, the Chainlink partnership, RWAs through Horizon, and the growth of GHO as core parts of the project’s 2025 vision.

What This Could Mean for AAVE’s Price

In an earlier update, two whale wallets deposited over 41,000 AAVE tokens on April 1 to centralized exchanges (CEXs) within 24 hours, which put pressure on the token’s price.

At the time of writing, AAVE was changing hands for $139.18, up 2% in 24 hours. This is proof that the new update hypes the community.

It is important to add that now that Aave is buying back its tokens, it is adding steady demand for the native asset. Based on this direction, experts believe this can help support the token’s price. This is because there will be fewer tokens available on the market.

Similarly, the repurchased tokens will go to people who stake their AAVE. That means stakers are likely to receive more rewards, which gives people more reason to hold their tokens instead of selling them.

In February, Aave reached $210 million in liquidations. Remarkably, the protocol did this without incurring any bad debt. This success demonstrates that DeFi protocols can effectively handle liquidations, even during periods of market distress.

Disclaimer: Coinspeaker is committed to providing unbiased and transparent reporting. This article aims to deliver accurate and timely information but should not be taken as financial or investment advice. Since market conditions can change rapidly, we encourage you to verify information on your own and consult with a professional before making any decisions based on this content.

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