AAVE drops 1.45% while DAO evaluates a $50M repurchase plan

As of October 31, 2025,

experienced a 1.45% decrease over the previous 24 hours, settling at $217.57. Over the past week, the token has fallen by 9.37%, with a 20.47% decline in the last month and a 29.33% drop over the past year. Despite these recent fluctuations, AAVE continues to play a significant role in the network, maintaining a market capitalization of $3.5 billion and robust daily trading activity. The token is currently holding important support levels, which could signal short-term price stabilization.

DAO Evaluates Token Buyback Proposal

Six days ago, a notable development for AAVE emerged as the Aave DAO began deliberating a framework for an annual $50 million token buyback. The plan suggests weekly purchases, with the amount adjusted according to prevailing market conditions. If this proposal is approved and implemented, it could help establish a price floor for AAVE by boosting demand and reducing the available supply. This initiative would be in line with broader DeFi trends, where projects are refining token models to enhance long-term value for holders.

AAVE’s Role in DeFi Infrastructure

AAVE serves as a foundational component of Ethereum’s lending ecosystem, allowing users to earn interest on deposits and access flash loans without intermediaries. Recent blockchain data indicates a rise in the use of Aave’s platform, especially for yield-focused strategies. Governance participation has remained consistent, with ongoing discussions centered on risk controls and protocol improvements. This active involvement points to a dedicated community of contributors, which bodes well for sustained growth.

Technical Analysis and Market Outlook

Recent price movements show buyers stepping in during declines, helping to maintain support at key levels. Although the token is facing short-term downward momentum, the stabilization of these price points could suggest an upcoming reversal or a period of consolidation. Market analysts believe that if Aave’s buyback plan is enacted, it could provide structural support for the token, particularly if the broader DeFi market recovers.

Backtest Analysis

A recent backtest reviewed AAVE’s performance following dividend and token buyback announcements, analyzing 1,377 such events from January 2022 to October 2025. The findings revealed that the average cumulative excess return after 30 trading days was about +4.5%, which was nearly identical to the benchmark return of +4.46%. This indicates that these announcements alone do not consistently provide a trading advantage.

Daily win rates ranged between 49% and 52%, showing no meaningful directional tendency. This suggests that while buyback frameworks may influence investor sentiment, they do not independently offer a dependable price signal.

The analysis also pointed out a possible drawback: using broad timeframes for event dates may have weakened the results. A more precise approach—focusing on the exact dates of buyback announcements and examining shorter periods after the events—might produce clearer findings. Furthermore, combining these events with technical criteria, such as momentum or volatility measures, could reveal stronger effects.