AAVE Rally Speculation Grows After Hayes Buy & Buyback Strategy

The core of the bullish thesis for AAVE lies in its updated ‘Aavenomics’ framework, released on March 4. This strategy is powered by the protocol’s formidable financial performance, which generates approximately $130 million in annual revenue. This robust income stream provides the Aave DAO with the capital to execute a consistent and impactful token buyback program. Since the strategy’s implementation, the DAO has successfully purchased 83,454 AAVE tokens from the open market, worth $5.42 million and equivalent to 0.5% of the supply.

This is not a one-off event but a sustained commitment. The Aave DAO is systematically buying back between $500,000 and $1 million worth of AAVE tokens each week. The economic principle behind this is straightforward: by permanently removing tokens from circulation, the program reduces the available supply. All else being equal, a shrinking supply against steady or growing demand creates upward pressure on the token’s price. Furthermore, this action aligns the protocol’s financial health directly with the interests of AAVE holders, creating a powerful feedback loop of value accrual.

Aave’s confidence is grounded in its commanding position within the DeFi ecosystem. The protocol recently reported a staggering 70% market share of all lending activity on the Ethereum blockchain. This dominance is further illustrated by its Total Value Locked (TVL), which, according to data from DeFi Llama, stands at nearly $40 billion. This cements Aave’s role as a foundational pillar of the global DeFi landscape.

A central, and perhaps most ambitious, part of its new strategy is the heavy focus on GHO, Aave’s native decentralized, collateral-backed stablecoin. The protocol is aggressively pushing for GHO’s adoption and expansion to strengthen its position in the highly competitive stablecoin market. The success of GHO is intrinsically linked to the AAVE token. As the analyst noted in a September 23 X Thread, where they proclaimed AAVE was going ‘chad mode,’ the token is central to the stablecoin’s governance and ecosystem. Widespread adoption of GHO would drive significant utility and demand for AAVE, creating another powerful engine for value growth beyond the buybacks.

While strong fundamentals provide the foundation, high-profile market moves often act as a catalyst. The optimism surrounding AAVE gained a significant credibility boost from a major purchase by Arthur Hayes, the former CEO of the crypto derivatives exchange BitMEX. According to blockchain data tracked by Lookonchain, Hayes acquired 1,630 AAVE tokens for 374,999 USDC, paying an average price of around $230 per token.

Cryptocurrency traders and analysts have scrutinized this transaction, viewing it as a strong signal of confidence from a seasoned industry figure. The timing is particularly noteworthy. Hayes funded this purchase, at least in part, by reducing his exposure to another project, Hyperliquid (HYPE), by selling 96,628 HYPE tokens valued at roughly $5.1 million over the preceding weekend. This portfolio adjustment suggests a strategic reallocation of capital into AAVE, interpreted by the market as a calculated bet on its future outperformance. This high-profile endorsement has reinforced the positive sentiment already brewing from the protocol’s own aggressive strategy.