On March 4, Aave recently announced a proposal to update the Tokenomics of AAVE. This update includes a plan to launch an AAVE Token buyback program to reduce the circulating supply and increase the value for the holding community, while also activating a fee mechanism to optimize the revenue stream for the protocol.

According to the proposal, the Aave Chan Initiative (ACI) emphasizes that while maintaining a prudent treasury management policy, the new program may allow the Aave Finance Committee (AFC) to execute AAVE Token buybacks at a rate of $1 million per week for the first 6 months. The goal of this plan is to support the value of AAVE, while also increasing the level of financial allocation to the community and the development activities of the protocol.

In addition to the buyback program, Aave also plans to activate a fee mechanism from transactions on the platform to create a sustainable revenue stream. According to ACI, by 2025, Aave may achieve new revenue from various sources, allowing the AFC to expand the buyback budget through a subsequent proposal. This could have a positive impact on the Aave ecosystem, driving long-term sustainability and strengthening the community's confidence in the protocol.