AAVE +8.63% in 7 Days: DeFi Buyback Surge and Treasury Innovation

On NOV 9 2025, AAVE rose by 0.76% within 24 hours to reach $204.75, AAVE rose by 8.63% within 7 days, dropped by 10.56% within 1 month, and dropped by 33.84% within 1 year.

AAVE, the leading decentralized lending platform, has entered a transformative phase as it joins a growing trend of deflationary tokenomics within the DeFi space. Following the announcement of a $50 million annual buyback program, the Aave governance community approved a significant shift in revenue allocation, redirecting a portion of protocol earnings toward open-market token repurchases. This move marks a pivotal departure from inflationary models that once dominated the industry, signaling a maturation of DeFi governance and economic strategy. By tightening the circulating supply of $AAVE, the protocol is reinforcing long-term value accrual for token holders, aligning incentives with sustained network growth and participation.

The buyback initiative is part of a broader trend reshaping the DeFi landscape, with projects like EtherFi, Aster, and Maple Finance also introducing revenue allocation models that prioritize supply reduction and token holder rewards. Aave’s decision to shift from growth incentives toward consolidation and value capture reflects a strategic recalibration. Previously, the platform focused on attracting liquidity through token emissions, which, while effective in expanding total value locked (TVL), also created inflationary pressure. Now, the emphasis is on ensuring that protocol earnings flow back into the token’s economics, offering a more sustainable and predictable path for value generation.

Aave’s influence extends beyond buyback strategies. Nasdaq-listed company BTCS Inc. has adopted Aave as a cornerstone of its Digital Asset Treasury (DAT) strategy, leveraging the platform to manage liquidity and expand its Ethereum holdings. This move highlights the increasing adoption of onchain financial infrastructure by traditional institutions. By bypassing traditional banks, BTCS has accessed significantly lower borrowing costs—averaging 5-6% on stablecoins—and maintained full control over its assets. The platform’s 24/7 accessibility and automated lending processes have enabled BTCS to respond dynamically to market conditions, demonstrating the operational advantages of DeFi-based treasury management.

AAVE is now part of a broader narrative of DeFi protocols moving away from speculative growth models toward profit-sharing and token scarcity. Analysts project that these structural changes will improve price resilience during volatility and reinforce long-term value capture for holders. The shift is also changing how investors evaluate DeFi tokens, with metrics like protocol revenue and real yield gaining prominence over speculative growth indicators.

Backtest Hypothesis

To evaluate the potential effectiveness of the recent buyback trend, one could conduct a backtest focused on how Aave’s token price reacted to similar market events historically. For instance, an event-based backtest could identify instances when Aave’s price dropped by a specific threshold—such as 10%—and analyze the average price performance over the following days. The hypothesis would be that deflationary mechanisms, such as buybacks, could create a floor for the token price and improve its recovery trajectory. This approach would involve defining the universe of tickers (e.g., AAVE), specifying the event criteria (e.g., 10% drop in daily close-to-close returns), and determining the action to take after the event (e.g., buy at the next day’s open and hold for five days). By setting clear rules and constraints, the backtest could provide empirical insights into whether Aave’s deflationary strategy has historically supported price stability and recovery.