Aave Protocol’s Growth Strategy Fuels Speculation of AAVE Price Surge

After the State of the Union update highlighted strong revenue and consistent weekly token buybacks, analysts are now anticipating a potential rally for AAVE.

This optimism is reinforced by a recent high-profile purchase by former BitMEX CEO Arthur Hayes, who acquired 1,630 AAVE tokens.

Aave’s Market Dominance and New Strategy

A crypto analyst shared the update in a September 23 X Thread, proclaiming that “AAVE is going chad mode.”

This aggressive strategy is backed by its strong financial performance, with its revenue reaching $130 million annually.

This  financial position enables the Aave DAO to commit to a regular buyback program, purchasing between $500,000 and $1 million worth of AAVE tokens each week from the open market. By doing so, the token’s circulating supply reduces, which can increase its value and align the interests of the protocol with its holders.

Finally, a central part of the new strategy the analyst noted is the protocol’s heavy focus on GHO, Aave’s decentralized collateral-backed stablecoin. The protocol plans to support its adoption and expansion, with the aim of strengthening its position in the competitive stablecoin market. This is because the success of GHO would further drive utility and demand for the AAVE token, the same way it is used in the stablecoin’s governance and ecosystem.

These measures are part of the updated Aavenomics framework released on March 4, with the project successfully buying back 83,454 AAVE worth $5.42 million, equivalent to 0.5% of the supply since then.

Arthur Hayes’s High-Profile AAVE Purchase

Analysts portray the confidence in Aave’s future is grounded in the protocol’s fundamental performance and market standing, with the project recently reporting a 70% market share of all lending activity on the Ethereum blockchain. Data from DeFi Llama also shows that the platform boasts a TVL of nearly $40 billion, cementing its lead role in the global DeFi ecosystem.

Elsewhere, Arthur Hayes has also gotten attention with his latest portfolio adjustment. He purchased 1,630 AAVE tokens for 374,999 USDC, at an average of around $230 per token, according to blockchain data tracked by Lookonchain.

Cryptocurrency traders and analysts have closely followed the transaction, with many examining the timing and motivation behind Hayes’ move. Interestingly, the investor had earlier reduced his exposure to Hyperliquid by selling 96,628 HYPE tokens, valued at roughly $5.1 million, over the weekend.