Aave Cryptocurrency Establishes Finance Committee, Eyes Massive $65M Reclaim

• Aave cryptocurrency proposes a comprehensive “Aavenomics” update, introducing revenue redistribution, a $1 million weekly AAVE buyback, and enhanced safety mechanisms.
• The proposal includes establishing the Aave Finance Committee and deprecating the LEND token, reclaiming $65 million for the ecosystem reserve.
• Following the announcement, AAVE’s token price surged 7.8%, reflecting increased investor confidence.

Aave cryptocurrency’s ecosystem may undergo a significant transformation following a recent proposal by the Aave Chan Initiative (ACI). On March 4, 2025, ACI founder Marc Zeller introduced an Aave Request for Comment (ARFC) outlining the initial phase of “Aavenomics.” This proposal seeks to enhance Aave’s tokenomics, redistribute protocol revenue, manage secondary liquidity, and phase out the LEND token.

Zeller emphasized the significance of this development, stating, “After half a decade of hard work, with the ACI, we’re proud to present the updated Aavenomics proposal to the Aave DAO. We consider it the most important proposal in our history.”

Key Components of the Proposal

1. Aave Finance Committee (AFC): The proposal suggests establishing the AFC to oversee treasury assets and liquidity strategies. A notable initiative under the AFC’s purview is a $1 million per week AAVE buyback program, set to run for six months, with potential adjustments based on the protocol’s financial health.
2. Secondary Liquidity Optimization: Aave currently incurs $27 million annually in liquidity costs. The proposal aims to reduce these expenses by implementing a more efficient system that combines staking and active management, gradually shifting towards buying back AAVE from the market instead of distributing it as rewards.
3. Umbrella Safety Module: To bolster user protection, the proposal introduces the Umbrella safety module, designed to safeguard against bad debt “up to billions.” This mechanism aims to enhance the protocol’s resilience against potential financial setbacks.
4. Anti-GHO Fee Mechanism: The proposal plans to implement “Anti-GHO,” a new fee switch mechanism that redistributes a portion of GHO stablecoin revenue to AAVE stakers, replacing the current GHO discount system.
5. Deprecation of LEND Token: Aave’s original governance token, LEND, was upgraded to AAVE in 2020. The proposal seeks to formally deprecate the LEND-to-AAVE migration contract, reclaiming approximately 320,000 unclaimed AAVE tokens, valued around $65 million, for the ecosystem reserve.

Aave Cryptocurrency Market Reaction

Following the announcement, AAVE cryptocurrency experienced a significant price surge. The token jumped 7.8%, rising from $174.10 to $187.71. This uptick reflects growing investor confidence in Aave cryptocurrency’s strategic direction.

As of March 5, 2025, AAVE is trading at $197.25, with a 24-hour trading volume of $521.1 million. The token’s market capitalization stands at approximately $2.97 billion, with a total value locked (TVL) of $19.29 billion across its protocols.

Source: TradingView

The proposal is currently open for community feedback. The Aave DAO will gather input before moving to an off-chain Snapshot vote. If approved, it will proceed to a formal on-chain governance proposal (AIP) for final execution.

This proposal marks a pivotal moment for Aave cryptocurrency, signaling its commitment to innovation and sustainability in the DeFi ecosystem.