Aave DAO has unveiled a governance proposal to reinforce the AAVE token economy. The proposal includes initiating buybacks and improving revenue distribution.
Weekly AAVE Buyback Plan
The main aspect of this proposal is the launch of a 'buy back and distribute' system. Aave DAO operates a plan for a $1 million weekly AAVE buyback, allowing adjustment in quantities via protocol financial evaluations. This plan increases AAVE ownership value and improves liquidity.
Redistribution of Surplus Revenue
This new proposal outlines a method for distributing surplus revenue. Under the new model proposed by Aave DAO, the rewards will be paid out in wETH, USDC, and USDT alongside AAVE. This approach allows stakers to receive direct revenue benefits.
Enhancements to Liquidity Management
The proposal outlines plans to improve AAVE's secondary liquidity management. The objective is to reduce annual liquidity costs of approximately $27 million by transitioning towards a more efficient liquidity model. The new model integrates staking mechanisms and active liquidity management to enhance stability and reduce costs.
The Aave DAO will obtain community input before starting the Snapshot voting process. An on-chain governance vote will take place after proposal approval before the proposal receives final execution. This approach ensures active participation from the community in decision-making.
