So what are we going to do with all the bought back AAVE?
1 Like
From a holderās perspective, I prefer buyback and burn. Reducing supply is far more effective for increasing token value accrual. Even Uniswap Labs is implementing this approach for $UNI; arguably DeFiās most criticized governance token. Theyāve finally recognized the merit of the burn mechanism.
1 Like
Iām not a fan of burning either. Burning in simple words just means:
- Make money
- Buyback a token
- Burn said money
And depending on the price of said token it can be that you buy it for 1m$ but burn an equivalent of 8m$ worth of that token.
But what if you buy if for 8m$ but burn it for only 500k$?
Was it worth it from an economical POV? That money could have been used for growth or other initiatives.
The only economical reasonable burning mechanism in my opinion is the one Ethereum has. But right now there is no chance to implement something similar for Aave without actively affecting user and making it unattractive to use Aave.
4 Likes
I think itās time to implement a proper revenue share for token holders. Iām fully supportive of a growth-focused strategy, but Iām growing weary of waiting for a fee switch that benefits holders while $AAVE remains without meaningful utility. Weāre not even seeing a concrete plan to enable borrowing against stkAAVE.
Why buyback and burn wins: it benefits 100% of holders equally through permanent supply reduction, while buyback and distribute its a future distribution of those rewards and creates sell pressure from an a unknown growth plan.
1 Like
I tend to agree with @EzR3aL on the point that most of the value should be spent on growth and gaining highest market share. Once close to full penetration market share is reached. What make sense is then to push revenue up to the tokenholders in form of burn or other methods.
Token burn is quite an easy addition when it actually provides the highest value. Sky is a great example where token burn hasnāt really played out well since it misses the symbolic announcements.
Besides lending, post Aave V4, Aave needs to expand to other products and own the full stack.
4 Likes
And what about token holders and providing real utility to the governance token? I think after Uniswapās announcement, most DeFi projects will face significant pressure if they donāt implement revenue sharing. As I said, Iām supportive of the growth plan, but Iām deeply disappointed not seeing any form of value return for token holdersāeven allocating 10% of current buybacks to stakers would make a meaningful difference. I also canāt believe no one is taking ownership of enabling borrowing against stkAAVE. Itās quite disappointing that everyone focuses on protocol growth, yet none of the service providers are working to optimize tokenomics for holders, who are apparently expected to be āsatisfiedā with non-existent utility. I donāt want AAVE to become the next UNI. I want us to be the next HYPE in terms of tokenomics.
1 Like
The main issue here is, no one from the holder are doing simple math to calculate the estimated rewards.
Aaves business is a low margin one.
That means you need to re invest into growth in order to build up better margin.
Now letās talk about some numbers. Assuming the same 2.7m Aave token are getting staked and equally these get 10% of the buybacks which are roughly 5m$ per year this would result in 0.084% yield at current prices.
Is this the significant number you have been talking about?
Also this here.
You are free to write the code and do everything around it to make it happen. The DAO will check it for security reasons and then we are good to go.
And maybe to add it. Yes I am an Aave holder myself, and of course I would wish for the price reflecting the protocols market share and strength. But itās up to the market to decide this. I would say that at one point it will realize. Thatās the time to shine.
1 Like
Your math is completely wrong. Itās 0.84%, not 0.084%. Youāre off by a factor of 10.
APY = ($5M / $220 per AAVE) / 2.7M staked AAVE Ć 100 = 0.84%
And frankly, the fact that youāre asking me to āwrite the codeā while dismissing legitimate holder concerns is exactly the problem. Token holders have funded millions to service providers for years, and all Iām doing is expressing frustration that:
-
No one has enabled borrowing against stkAAVE
-
No meaningful rewards exist for the people securing the protocol
But sure, letās keep talking about āreinvesting in growthā while the actual stakeholders subsidizing everything
2 Likes
Okay then I have been adding a zero too much. My bad. Iām typing this on a phone right now.
But still 0.84% after taxes is probably still not a remarkable yield. I can get more even with the worst option for EUR yield.
So again is it worth it? Or would it be better to invest it into growth to increase buyback amount? So it can be 2.5% (still low btw) at one point?
People securing the protocol are now people staking in Umbrella. And rewards are pretty good there. I enjoy them.
Additionally I have a feeling people are like, SP have to make the token more attractive instead of the protocol. Which one is more important in the end? I know for you itās about the money clearly, which is totally fine. But majority here is in for the long term. This revenue sharing and buyback narrativ is weird tbh. Amazon isnāt giving dividends although they became pretty big, right? I assume itās because they want more growth and total dominance.
And SP are being paid in GHO mainly, which comes from the borrowing costs. So itās actually borrower paying SPs. St least 80% is from this source. Has been different in the past though.
But again, if they had not focused on growth, then Aave wouldnāt make 100m+ this year and be able to do these buybacks. Check the Tokenlogic dash and check the revenue growth and costs for each year.
Dude, Iāve been holding this token since LEND days. Your whole point of view sounds quite socialist to meāI totally get it if youāre living in Europe. But Iām both for the money and the growth of the protocol. Iāve invested over 8 figures in this project, so donāt blame me for not being āin for the techā only.
I donāt think service providers should focus on the token, maybe one? Maybe Avara? I donāt know. Itās my opinion and I want to express it.
Iām glad Uniswap Labs made its move. Aero has been giving all fees to token holders despite competing with Uniswap. Itās fine to focus on growth, but itās also important to show some appreciation to holders.
If the market isnāt appreciating AAVEās strong position, itās because the token is useless. The market is always right. Good tech, bad token.
AAVE is a mature protocol making $100M+ in revenue. At some point, you need to reward the people who got you here.
3 Likes
Congrats on the insane profits!
Been here since Ethlend as well.
And just something to add. Most SP are working towards token economics as well. ACI updated the Aavenomics with still a lot to come. And other SP are helping and leading initiatives as well. So there is definitely work being done but also still a lot to do. And creating a proposal for further development can be done anytime, which is great.
2 Likes
As an AAVE holder, Iām fully aligned with the focus on growth. Too many people underestimate how hungry other DeFi teams are
DeFi is still incredibly young. Iād much rather see AAVE compound over the next five years and generate billions in yearly revenue than chase short-term rewards now
AAVE isnāt losing momentum. Itās winning across every metric that matters. Reinvesting in growth at this stage feels like the right call, and the potential upside over the next decade could be massive (5, 10, 15, perhaps 20x greater revenues)
Yeah, it sucks that $AAVE (the token) doesnāt always get the recognition it deserves. But the $50M buyback already in place is a solid move, but honestly, Iād even prefer to see more of that capital pushed into growth 
Great things can take (a lot) of time, and I think the current situation is a perfect example of that
3 Likes
We only have safety module / umbrella rewards rt? There is no revenue sharing for token holders yet. May be in future.
1 Like
Iām agree with you.
As I have said:
In my opinion, increasing the buyback is pointless. Itās a good thing to show and build confidence in AAVE investors, but itās pointless for me. Revenues are too low. Even with 100% of revenues (150 million/year), for AAVE estimated at $5 billion, thatās only a 3% ādividend.ā
I also like the idea of āākilling competitors. When theyāre no longer present, we could increase our margins a little, and therefore our revenues, and become the king of DeFi.
For me, we need to focus rapidly on the expansion of $GHO. I want GHO to reach the top 5 stablecoins.
2 Likes
Most important focus area should be protocol growth because Aave Protocol needs growth. Growth provides value for the token holders. Less growth, less additional market share, less value accrual for token holders.
Also currently there is StkAAVE as a way retain rewards with AAVE.
3 Likes
80% of revenue to reinvest for growth. 20% to keep the holders excited 
3 Likes
I am not seeing any value coming back directly (in the form of rewards) or indirectly in the form of token appreciation. In terms of Marketcap weāve lost significant positions, we are sitting at #53. The market is always right. Time to change the perception.
stkAAVE without the borrowing option itās kind of useless
5 Likes
I think merging #stkaave into #aaave with 1 or 2 percent yield will be very beneficial and attractive for users . It will create more loans and give holders a yield that currently we donāt have.
3 Likes
The issues with allowing StkAAVE as collateral are
-
StkAAVE for now is still illiquid; itās hard for liquidators to take volatility risk during the cooldown period unless theyāre provided with a significant liquidation bonus
-
StkAAVE is still designed to cover a bit of potential bad debt in the protocol, making it a risky collateral, and will hurt the potential LTV of the asset
-
StkAAVE rewards via AAVE emission are set to be slowly deprecated alongside any risk associated with bad debt. StkAAVE yield is trending toward zero in AAVE. The yield-bearing collateral will be short-lived
-
StkAAVE is set to have anti-GHO rewards, but the current GHO economy canāt sustain a yield for StkAAVE; the transition will take time.
3 Likes
Fine ā but then letās enable real revenue sharing for the people actually holding, staking, and supplying AAVE, and sunset stkAAVE entirely; we already have Umbrella. Itās perfectly acceptable to stay committed to the āgrowth-firstā philosophy, but the reality is that other protocols with a fraction of Aaveās market share are already distributing protocol revenue directly to their governance token holders.
Aave is already a dominant player. Iām fully aligned with prioritizing growth, but itās getting increasingly hard to ignore how poorly the AAVE token has been performing: no meaningful utility, no tangible value accrual, and no clear roadmap toward a healthier token economy. We are losing a lot of marketcap positions, this should be a wake up call.
If growth truly comes first, then the community deserves to understand:
-
Which KPIs define that growth?
-
What specific initiatives are planned to make AAVE attractive to long-term holders
Years of flat token performance and zero rewards for committed holders is not a sustainable design. At some point, the protocol needs to acknowledge that retaining and incentivizing its base matters just as much as expanding TVL.
5 Likes