In a groundbreaking announcement made on March 4, 2025, Marc Zeller, the founder of the Aave Chan Initiative (ACI), presented a comprehensive proposal aimed at overhauling Aave’s tokenomics. This proposal, which Zeller deems ‘the most important in Aave’s history’, introduces a new model for revenue redistribution, a cutting-edge safety system dubbed the ‘Umbrella’, and the establishment of the ‘Aave Finance Committee’ (AFC)
The core component of the proposal is the innovative revenue redistribution model. This model maintains the existing distribution for GHO stakers—known as the “Merit” program—and introduces a novel non-transferrable ERC-20 token referred to as Anti-GHO. According to the details outlined in the proposal, Anti-GHO tokens will be generated by all AAVE and StkBPT stakers, providing additional input into Aave’s financial ecosystem.
Notably, Zeller has highlighted that the cash reserves within Aave’s decentralized autonomous organization (DAO) have inflated by an impressive 115% since August 2024. This revenue model hinges significantly on the interest fees accrued from loans and liquidation processes, ensuring a sustainable financial pathway for Aave in the competitive DeFi landscape.
Alongside this, the Umbrella safety system is proposed to bolster user security by protecting against bad debt, potentially shielding users from losses amounting to billions. This system emphasizes the importance of liquidity commitments that remain intact until the predetermined “cooldown maturity,” thereby making bank runs considerably less damaging.
Moreover, the proposal incorporates a token buyback and redistribution plan. In a bid to foster investor confidence and enrich the ecosystem, Zeller suggests initiating a buyback program at a rate of $1 million per week for the first six months. The aim of this initiative is to engage market makers in acquiring AAVE tokens on the secondary markets, subsequently redistributing them back to the ecosystem reserve.
With the rise of decentralized finance (DeFi) — exemplified by the fact that lending protocols have amassed an astounding $39.5 billion in total value locked (TVL) — Aave remains at the forefront, currently commanding a TVL of $17.5 billion. The protocol’s robust performance includes generating substantial revenue streams, having raked in $8.3 million in fees within the past week alone.
As DeFi continues to evolve and expand its market share, Aave’s innovative proposals signify a strategic move towards enhancing the overall value and security of its offerings, setting a precedent for future developments within the industry.
