AAVE's token repurchase program has been approved, Aave faces price struggle

The Aavenomics proposal has been officially passed, and the AAVE agreement has ushered in major reforms! The proposal aims to modify the token economics of the AAVE protocol and introduce a token repurchase mechanism, and has received more than 427,000 votes from AAVE DAO, far exceeding the quorum.

Marc Zeller, founder of the AAVE Initiative Chain (ACI), announced that the proposal, which he proposed was overwhelmingly passed, with votes of up to 427,126 in favor and only 1,963 against.

The core of the proposal is to spend $1 million a week on AAVE tokens for six months. This is seen as an experimental move to reduce the circulation supply of AAVE and thus increase its value. Zeller said this is just the beginning, and the DAO plans to continue the repurchase program for a long time, while the current repurchase amount is a conservative estimate.

Given the recent crypto market downturn, the AAVE protocol is able to buy back more tokens at lower than expected prices. It is expected that AAVE will buy back 2.5% of the total supply by the end of the year.

As one of the leading decentralized finance (DeFi) protocols, AAVE has a total locked position value of approximately US$20 billion and supports multiple blockchains. However, despite the positive news of the buyback program, AAVE prices have fallen 18% in the past 24 hours, falling to $115 at one point before rebounding to $121. This price volatility differs from market expectations, and token repurchases usually bring about a positive market response. But in the long run, if the repurchase strategy is successful, the value of AAVE is expected to be improved.

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