GuShiio.com Aave is about to join the DeFi dividend army. On March 4, the Aave community proposed a new proposal to update its token economy model, which will not only strengthen its competitive advantage in the liquidity war, but will also accelerate DeFi’s transformation into a sustainable value capture model.
Author: Nancy, PANews
After DeFi protocols such as Sky, Uniswap, Ether.Fi, Synthetix and Ethena have successively adopted or proposed token repurchase strategies, Aave, the decentralized lending leader, is about to join the DeFi dividend army.
On March 4, the Aave community proposed a new heavyweight proposal to update its token economy model, including initiating AAVE repurchase, redistributing excess income from the agreement, terminating the LEND token migration, and upgrading secondary liquidity management. Boosted by this, CoinGecko data showed that AAVE has increased by 21.3% in the past 24 hours.
Aave plans to open a dividend model and proposesStill in the stage of soliciting opinions
In DeFi’s liquidity battle, Aave relied on its abundant cash flow and innovative capabilities to firmly occupy the top spot in DeFi’s lending field.
Aave’s new Aavenomics proposal also revealed that Aave’s market share and revenue Aave increased steadily in the past two years, including the supply of GHO stablecoins exceeding US$200 million and Aave DAO’s cash reserves reaching US$115 million. This growth is due to Aave’s near-monopoly revenue dominance in lending agreements and its continued investment in innovation, such as the recent upgrade to Aave 3.3 and the upcoming Umbrella self-protection system. More noteworthy is that Aave expects its revenue to increase significantly in 2025 due to SVR (Volatility Protection Mechanism)(which may exceed US$10 million per year), which can provide financial support for Aavenomics’s implementation.
As investors are paying more and more attention to the value capture capabilities of the DeFi protocol, many DeFi projects have begun to shift to dividend or repurchase models to enhance the ability to reward the value of tokens. Aave’s repurchase proposal demonstrates multiple advantages, including strong cash reserve support, diversified income structure, high-quality asset rewards, and efficient governance and execution efficiency.
The proposal proposes the following key measures:
· Token repurchase and allocation:Aave plans to launch a “Buy and Distribute” program to use excess revenue from the agreement to repurchase AAVE tokens in the secondary market or through market maker partners and allocate them to ecosystem reserves. The initial plan is to be implemented at a rate of US$1 million per week for 6 months, or US$24 million for repurchase, and will be adjusted according to the overall budget of the agreement. This mechanism aims to reduce circulation supply and increase token value while providing a sustainable source of the DAO’s AAVE budget.
· Umbrella andAFC was established:The proposal points out that Umbrella is a protection mechanism and growth tool for Aave users, and proposes to reallocate part of the excess income of Aave DAO to Umbrella aToken pledgers. To implement this plan, the proposal proposes the formation of the Aave Financial Committee (AFC), composed of Chaos Labs, Tokenlogic, Llamarisk and ACI, setting a 3/4 signature threshold. AFC will be responsible for managing collector contract assets, defining Umbrella liquidity goals, and implementing budget allocations through Tokenlogic’s monthly financial management AIP.
·Redistribution of agreed income:The proposal proposes the creation of ERC20 tokens to Anti-GHO enhance rewards for Aave ecosystem pledgers, which are generated by AAVE and StkBPT pledgers. The initial generation of Anti-GHO is set at 50% of GHO revenue, of which 80% is allocated to StkAAVE holders and 20% is allocated to StkBPT holders. Based on current GHO borrowing rates and supply, Aave distributes US$12 million in agreement revenue to GHO pledgers every year.
End of LEND migration:Nearly five years after the LEND-to-AAVE migration contract runs, Aave will close the channel and recover the remaining 320,000 AAVE (approximately $65 million) and inject them into ecosystem reserves to provide more funding for growth and security.
·Secondary liquidity management optimization:Aave DAO currently allocates approximately US$27 million per year from ecosystem reserves (based on current AAVE valuations) for secondary liquidity incentives. The proposal proposes a hybrid model that combines StkBPT pledge with direct management by the Aave Liquidity Committee (ALC) to achieve greater liquidity at lower costs.
However, the proposal is still in the comment solicitation stage, and if consensus is reached, the proposal will be upgraded to the Snapshot stage. If approved, Aave will authorize the establishment of AFC and gradually implement it through AIP.
DeFi may welcome favorable policies and the White House supports themRevoke the DeFi Broker Rule
The release of the Aave proposal comes as the DeFi industry may have a window for breathing space and growth due to favorable policies.
According to the Administrative Policy Statement issued by the White House Office of Management and Budget (OMB), the U.S. government supports S.J. Res. 3, a bill sponsored by Senator Ted Cruz and others to veto the Internal Revenue Service (IRS) rule on “reporting of total income by brokers selling digital assets.”
It is understood that the rule was originally proposed by the Biden administration in late 2024, expanding the definition of broker to cover DeFi protocol-related software, and requiring some DeFi users to report total proceeds from crypto transactions and taxpayer information. The White House believes that this regulation improperly increases the compliance burden on U.S. DeFi companies, hinders innovation, and raises privacy issues. The statement made it clear that if S.J. Res. 3 is submitted to the president, senior White House advisers will recommend that the president sign the bill and make it law to repeal the relevant IRS regulations.
In response, U.S. Senator Lummis commented that “the IRS’s regulations on DeFi fundamentally misunderstand how decentralized technology works. I have witnessed firsthand how regulatory clarity-not over-regulation-promotes innovation. These tough federal rules could push U.S. crypto entrepreneurs overseas at a time when we should be cultivating the industry domestically. It’s an honor to work with Senator Ted Cruz to undo this attack on the crypto community.”
The White House’s signal of support could signal a major shift in the direction of crypto policy. For the DeFi industry, if the rules are repealed, DeFi projects, including Aave, will be exempted from cumbersome reporting obligations and reduce operational compliance costs, retain decentralized characteristics, and may bring back funds and talent, further stimulating the craze of DeFi innovation in the United States.
As the DeFi industry faces a more relaxed development environment, Aave’s innovation in token economics will not only strengthen its competitive advantage in the liquidity war, but will also accelerate DeFi’s transformation into a sustainable value capture model. Real income is not only Financial indicators are also the cornerstone of building a sustainable ecosystem.
