Aave DAO Unveils Major Upgrade Proposal, AAVE Surges 21%
Aave’s financial reserves have surged by 115% to $115 million since mid-2024, while its GHO stablecoin has expanded to a $200 million supply, generating strong revenues. Now, Aave DAO has proposed a sweeping upgrade aimed at boosting AAVE token value and rewarding users.
The newly introduced “Aavenomics update” outlines several initiatives to enhance the platform’s economic model. AAVE tokens have jumped 21% in the past 24 hours, significantly outperforming the broader market, where the CoinDesk 20 (CD20) index is up just 3.5%.
Marc “Billy” Zeller, a core contributor, described the proposal as the most significant in Aave’s history:
“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, feel free to have a read and provide feedback.”
Key Highlights of the Proposal
- Enhanced Profit Sharing: Aave plans to increase rewards for users who stake their AAVE tokens, strengthening long-term incentives.
- Anti-GHO Mechanism: A new non-tradable token, Anti-GHO, will allow users to either burn it to clear GHO debt or convert it into staked GHO (StkGHO) for additional rewards. Half of GHO’s $12 million annual revenue will fund this system.
- Weekly Buyback Program: The DAO aims to allocate $1 million per week to purchase AAVE tokens from the open market, stabilizing its value and benefiting long-term holders. This buyback initiative could expand further within six months.
- “Umbrella” Protection System: To mitigate risk, Aave is introducing “Umbrella,” a self-protection feature designed to shield users from potential market crashes and bad debt. Unlike competitors, Aave emphasizes robust security for institutional and retail users alike.
The proposal is now open for community feedback, with an official on-chain vote expected in the coming weeks.
