AAVE Rises 8.63% Over the Past Week: DeFi Buyback Momentum and Treasury Advancements

As of November 9, 2025,

increased by 0.76% over the past day, reaching $204.75. Over the last week, AAVE gained 8.63%, but it declined by 10.56% in the past month and saw a 33.84% decrease over the past year.

AAVE, recognized as a top decentralized lending protocol, is undergoing a significant transformation as it adopts deflationary tokenomics, a trend gaining momentum in DeFi. After announcing a $50 million yearly buyback plan, the Aave governance community approved a major change in how revenue is distributed, allocating part of the protocol’s income to repurchasing tokens on the open market. This represents a notable shift away from the inflationary approaches that previously prevailed in the sector, highlighting a more mature approach to DeFi governance and economic planning. By reducing the available supply of $AAVE, the protocol aims to enhance long-term value for holders and better align incentives with ongoing network development and engagement.

This buyback strategy is part of a larger movement that is reshaping DeFi, with platforms such as EtherFi,

, and also rolling out revenue distribution models that focus on reducing supply and rewarding token holders. Aave’s pivot from growth-driven incentives to strategies centered on consolidation and value retention marks a deliberate adjustment. In the past, the platform prioritized attracting capital by issuing tokens, which helped boost total value locked (TVL) but also led to inflationary effects. The current focus is on channeling protocol earnings back into the token’s ecosystem, aiming for a steadier and more reliable approach to value creation.

Aave’s impact goes beyond its buyback program. BTCS Inc., a company listed on Nasdaq, has made Aave a key part of its Digital Asset Treasury (DAT) strategy, using the platform to manage liquidity and grow its

assets. This move underscores how traditional financial institutions are increasingly adopting onchain financial tools. By sidestepping conventional banks, BTCS has benefited from much lower borrowing rates—typically 5-6% for stablecoins—while maintaining full control over its funds. The platform’s round-the-clock availability and automated lending features have allowed BTCS to adapt quickly to market changes, showcasing the practical benefits of managing treasury operations through DeFi.

AAVE now exemplifies the broader shift among DeFi protocols from speculative expansion to models focused on profit-sharing and creating token scarcity. Experts believe these foundational changes will help stabilize prices during market swings and strengthen long-term value for investors. This evolution is also influencing how DeFi tokens are assessed, with greater emphasis now placed on metrics like protocol revenue and actual yield rather than purely speculative growth figures.

Backtest Hypothesis

To assess how effective the recent buyback trend might be, one could run a backtest analyzing Aave’s historical price reactions to similar market events. For example, an event-driven backtest could look for occasions when Aave’s price dropped by a set percentage—such as 10%—and then measure the average price movement in the days that followed. The underlying idea is that deflationary actions like buybacks could help establish a price floor and support quicker recoveries. This would involve defining which tokens to include (e.g., AAVE), setting the event parameters (e.g., a 10% daily drop), and outlining the response (e.g., purchasing at the next day’s open and holding for five days). By applying clear guidelines and limitations, such a backtest could offer data-driven evidence on whether Aave’s deflationary approach has historically contributed to price stability and rebounds.