Aave has introduced a new proposal that includes a Buy and Distribute program to strengthen the AAVE token’s value and liquidity. Under this plan, Aave will use $1 million per week to buy back AAVE tokens from the market. These purchased tokens will then be distributed strategically to support the protocol’s ecosystem.
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—worth about $65 million—will be reclaimed and moved to Aave’s treasury.
This decision strengthens 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 AAVE.
The proposal also contains two other items—Umbrella for user protection and Anti-GHO for revenue distribution. Umbrella is a system that will allow liquidity providers 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. Aave plans to activate Umbrella on multiple networks, including Ethereum, Avalanche, Arbitrum, and Gnosis, to maximize its impact.
The Anti-GHO model is a new non-transferable 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.
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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.
This new proposal was approved following the Aavenomics TEMP CHECK six months ago. The proposal was to evaluate and implement key economic updates to Aave’s ecosystem.
It was designed to ensure Aave’s long-term sustainability by improving revenue distribution, optimizing incentives, and strengthening its treasury.
Since its approval, Aave has grown its market share every quarter, maintained the highest revenue among lending platforms, and expanded the supply of its stablecoin, GHO, beyond $200 million.
