Aave DAO unveiled a significant proposal Tuesday outlining steps to boost value for AAVE token holders. The autonomous organization supporting the lending platform detailed plans to increase profit-sharing and user rewards.
AAVE tokens jumped 21% in 24 hours. This surge outpaced the broader cryptocurrency market, which rose just 3.5% according to the CoinDesk 20 index. Successful implementation could substantially improve the fundamental value proposition of holding AAVE tokens.
The proposal, termed an "Aavenomics update," received initial approval in August 2024. Aave's treasury has grown dramatically since mid-2024, increasing 115% to reach $115 million. The platform's GHO stablecoin has achieved a $200 million supply cap and generated strong revenue streams.
"Aave will be the only protocol able to protect users from bad debt up to billions, as competitors have essentially given up on protecting their users," the proposal stated. "This unique advantage will make Aave even more attractive, especially for institutions concerned with on-chain risks."
The plan includes increased profit-sharing for users who stake AAVE tokens to support the system. This represents a direct financial benefit for long-term token holders.
Another key component introduces "Anti-GHO," a non-tradable token with dual utility. Users can either burn it to eliminate GHO debt or convert it to staked GHO for additional rewards. Half of GHO's annual revenue—currently $6 million from a $12 million total—will fund Anti-GHO distribution.
The DAO also proposed a "buy and distribute" program allocating $1 million weekly to purchase AAVE tokens from open markets. This initiative aims to stabilize token value and reward users long-term. Buybacks could begin immediately with potential expansion after six months.
On the technical side, the proposal introduces "Umbrella," a self-protection mechanism designed to shield users from losses during market downturns. This system positions Aave as uniquely capable of protecting users from significant losses.
Disclaimer: The information provided in this article is for educational purposes only and should not be considered financial or legal advice. Always conduct your own research or consult a professional when dealing with cryptocurrency assets.