Aave Buybacks Under Aavenomics 3.0: What Gets Paid First?

and buybacks is also a big part of that with a more automated non-discretionary form that is also an important piece of the oven omics and this is a work stream that we're working now and hopefully have some more insights to share in the following weeks.

That was Aave's founder Stani Kulechov. Back in August he first floated a new plan in June called Aavenomics 3.0 and on Thursday the 26th of October on Aave's quarterly live stream he filled it in. All right, buybacks of the Aave token are coming back and this time with staking and burn on top. So if you hold Aave that's the detail you've been waiting for months for, right? But here's the bit most people skip.

Aave's buybacks didn't stop for some boring quiet reason. They stopped on the 19th of April the day after a hack elsewhere left a hole of tens of thousands of ETH sitting on Aave and part of how that hole got filled was a loan lined up from another network that still had to be paid back. So I'm going to show you who gets paid first, the someone researcher did on it and a check that you can run on any coin that promises to pay you and there's a link in the description guys the first one it changed how a lot of people handle big calls on coins like this including myself. All right, I'll tell you why before we're 5 minutes in because this comes down to one question. If you're holding Aave or any coin that says it pays you back from its earnings then when does the money actually start working for you and by the end of this video I'm hoping that you're going to know what was promised because I'm going to give you my opinion and the facts.

What has to happen first and the three decisions it leaves you with. Now here's what the call covered, right? Aave's leading app people deposit coins to earn interest and other people borrow against what they put in. Every single loan pays interest and a slice of that goes to the Aave DAO which is the treasury that Aave holders vote on. The plan is that the treasury uses earnings to buy Aave on the open market but reports of the call say part of what's bought would go to people who stake their Aave and the rest would be burned which means destroyed for good.

Now Aave also gave an update on something it switched on last month on Base the network built by Coinbase. You can actually borrow against Coinbase's tokenized American shares which are digital versions of a US company shares. Here's Kulechov explaining it in a video Base put out on Thursday. Let's watch this.

So, we're launching on Base stock-backed loans. This means that you're able [music] to use tokenized stocks as a collateral and borrow USDC [music] against that. And now, you can actually unlock liquidity against your stock [music] holdings. And it means that you will be able to hold a lot of these tokenized stocks, companies that are building the future, while being able to access your liquidity.

Go access your liquidity. Now, in plain English, she borrowed dollars against your shares without selling them. It's seven stocks to start for people outside the US, and it took in about nine and a half million dollars early on. And the business underneath is growing. Now, deposits were up 41% in the third quarter to about 33 and a half billion dollars.

That all sounds great, right? But there's no size for the buybacks. There's no start date and no vote yet. And when we checked Aave's own forum, there wasn't a proposal for it. So, the question is, what has to happen first?

All right, and that's what we're going to be going through in the video. So, welcome back to the Bull Run's channel. Grab a coffee, and let's listen to what my opinion is. It might not be the same as yours, but I'm not here to give you financial advice. I'm here to give you my opinion with the facts that I've researched.

I'll give you the good, the bad, and the ugly, all right? Because buybacks sound great until you check what's actually paying for it.

[music]

Now, picture it. You bought a coin because it had a proper business behind it, revenue coming in, and a plan to hand some of it back to holders, and something goes wrong somewhere else. The handouts stop, and 6 months later, you're still waiting. Now, the project's growing, the founder's up B, and your bags just sat there doing nothing while everything in the shop costs more. That's going to weigh you down, right?

The big funds holding these coins have analysts who read the treasury reports line by line. And most people holding a bag have a founder's livestream and a hopeful feeling. But nobody really hands you a plan for the meantime. So, most of us, including myself, just sit tight and hope. And that's exactly what the first link in the description is for.

All right, instead of waiting and hoping, with the short free video, a free chat about how your coins could be earning while you wait. And I'll tell you properly at the end, but if this is already hitting home, then check it out now. First, guys, why holders care? Well, a buyback means steady demand for the coin, whatever the mood, and if the coin gets burned, there are fewer left for everyone else. Under the old plan, the coins it bought were held in the treasury reserve.

And the new plan adds staking rewards and a burn on top. So, for a lot of holders, the buyback is the reason to own the token. It's not just to admire the business. So, let's go back, right? Aave's buyback started in April 2025.

The treasury voted to buy up to a million dollars of Aave every week as a 6-month trial, and it kept going after that. So, the plan came from Marc Zeller's Aave chain initiative. Here he is a few days before the vote on what he didn't want to happen.

So, we want to have a large buffer, and we we want to have a large treasury to make sure we never I don't want to be in a position where we have to go to the forum tomorrow and say, "Okay, we tapped the the the buybacks, or we stopped the buybacks because the uh it's not sustainable anymore." So, I prefer that we underdeliver in terms of buyback, at least at the beginning, then uh that we are like promising something that we cannot keep uh forever.

Something that we cannot keep forever. And to be fair to him, guys, the buybacks didn't stop because the plan ran out of money, right? They stopped because something happened outside of Aave. On Saturday, the 18th of April this year, a hacker found a weak spot in a bridge used by another project, Kelp. A bridge is what moves a coin from one network to another, and the hacker realized Kelp tokens called rETH had nothing real behind them.

So, about 290 million dollars worth on paper, and then they brought them to Aave. They deposited most of these tokens as if they were real and borrowed against 82 and 1/2 thousand real ETH against them. So, that's around 190 million dollars. Aave's own report says its code was never broken. It accepted a token that turned out to have nothing behind it.

Now, here's how the team at Galaxy, a big crypto investment firm, described the fallout across DeFi, and that's crypto lending and trading apps, 2 days later.

Well, the the other big issue right now is that like just the DeFi markets as a whole are just completely frozen, right? So, Aave took action quickly to basically freeze the rETH market they had, and then they also froze the wrapped ETH markets. And you know, that is the wrapped ETH market is the biggest market on Aave, right? Like borrowing and looping ETH is a huge demand for Aave products. And then also, a lot of people then went to the stables markets to try and get stables to kind of recoup some of their positions, and as a result, the USDC and USDT on Aave is at full utilization right now.

So, for all intents and purposes, until somebody comes in and pays back a loan or something like that, which we we're not really seeing happen right now, borrow markets in DeFi are absolutely frozen.

Now, did you catch how they put it? Absolutely frozen. Full utilization means every dollar in the pot had been lent out. So, there was nothing left to take out until someone paid back a loan. Around $15 billion was pulled out of Aave in 4 days, and the total volume locked in it fell from about $26 billion to under 19.

4 days after the hacker proposal went up to formally pause the buybacks. The reasoning was simple. Money spent buying Aave is money the treasury can't use to fill the hole, and we've seen what happens when a platform that pays you run short. On Sunday the 12th of June, back in 2022, Celsius, one of the biggest crypto lenders, stopped its customers taking money out. Let's watch CNBC the next day.

But then you've also got kind of very specific, you know, terrorist events, you know, Terra Luna blowing up about a month ago. You know, now over the weekend we have Celsius, which is one of the biggest crypto lending platforms, announce that it's suspending client withdrawals because of quote unquote extreme market conditions. You know, this is just coming on the heels of of Terra Luna's meltdown, and so investors are starting to, you know, find out that the counterparty risk in crypto is very real.

Now, Aave isn't Celsius, right? But Celsius was a company that took your coins and did what it liked with them, and it never showed you. Aave's loans are all on the public ledger, and its own report says the code held. But the lesson's the same one. When something pays you, the first question isn't how much.

It should be who's paying, from what, and what happens when something goes wrong. And that's the question most of us were never shown to ask. The funds holding this stuff ask it before they ever look at the payout. Most of us just watch the price and wait for good news. Now, there is a real bear case here, right?

An Aave holder should hear it. And this is all my opinion, but Aave's big pool lets everyone deposit back everyone else's loans. Now, that's why it's so easy to use and it's also why one bad token could hurt depositors who never touched it. Critics say that design shares the risk out too widely. So, that's a fair point and the answer from Aave is that it's moving new markets into separate walled-off hubs with the next version.

So, one bad asset cannot drag down the rest, but that only gets proven by running through the next bad day. So, will the buybacks actually be worth something? Well, maybe. The founders say soon. The critics say the risk hasn't gone away and you're the one holding the coin.

The honest way to answer is to follow the money and in the order it actually gets paid, right? So, let's do that. So, how did that hole get filled? Well, the total short hole from the hack started at about 163,000 ETH, clawing back what they could got down to around 75,000, then it was filled, right? So, donations from the wider industry covered part of it.

The treasury put in 25,000 ETH on its own and it lined up a loan of about 30,000 ETH from another network. It was Mantle over about as long as 3 years. Now, here's the bit almost nobody put in their headline. A DeFi analyst called Chado took the Mantle loan about 79 million dollars at a time and set it against what the treasury had already kept since last April. And that's about 167,000 dollars a day.

Now, if every penny went to a loan, it would take about 473 days. That's well over a year, right? The write-up calls it an extreme stress test, not a plan, and that's fair. Nobody says the loan has to be paid off before a single buyback, but it shows you the order. The repair job comes first and the buybacks come after it.

And Thursday's figures show the money still tight. That's the reveal. The buybacks are coming back, but they're queuing behind a balance sheet that's still being repaired. And the most famous investor alive has a rule for this. Here's Warren Buffett in a clip CNBC put out in May 2020.

Well, then the company should buy it. Depends on a couple of things. One is they ought to have retained the money they need for intelligent growth prospects. That's fine. And secondly, and this is a point that's never mentioned, they should be buying it back below what they think it's worth.

That comes first before any buyback. A buyback is only as good as the money left over everything else is paid. So, that's the healthy way around and it's how Aave's treasury is behaving, but But does mean that if you bought Aave because of the buyback, then you need to know you might be waiting a while longer and how you're earning while you wait. Now here's one free, all right? It's something I'll give because I want this community to start growing.

And it takes 5 minutes, so open the app, your coins are in and look at anything it says you're earning. Or any coin you hold that promises to pay you back and whether that buyback, staking rewards, interest, whatever it is. Then ask three things, right? Number one, where does the money come from? What gets paid before you?

And can you see it yourself? That's the three questions with Aave and you can ask them to every single coin. Now here's Kulachev again in that base video. Check this out.

And this is basically what blockchain is here to solve, [music] creating more programmability, reducing costs, and transparent. All this is visible on chain and not in quarterly reports, but every single block.

A block is just the next page of the public record added every few seconds, so you don't have to wait for the live stream when a buyback proposal does go up, it'll be on Aave's governance forum with the size and the start date and that treasury spending is public. Now if a coin cannot show you where it payouts come from, that tells you something, too. That's one check and the rest, like whether to hold, trim, or move while you wait and how to get your coins earning in the meantime, and who'd actually be paying you, it all depends on your own bag and that's the bit the team goes through with members. So what happens next? Well, a proper proposal has to go up, get debated, and get voted on and that's when we'll find out the size, the start date, and how much goes to stakers against how much gets burnt.

That's the sort of thing the research team keeps an eye on for members, by the way. And some of you are going, "Fair enough, but Aave's not Celsius, so I'll just wait for the buybacks." Well, you can, right? But waiting isn't a plan. Different setup entirely, but people earning on Celsius in June 2022 thought they knew who was paying them and they actually found out on the day withdrawals stopped. Now Aave ledger is public, so you don't have to wait blind, right?

Check it and decide what your money does in the meantime. So what's my honest take? Well, Aavenomics 3.0 is a good sign and the treasury putting in the repair job first is the grown-up way to do it and what it changes is how carefully we check what's actually paying us. If you'll be asking who gets paid first from now on, then pop Aave in the comments because that's kind of the goal that I want from you. So quick recap, Aave says buybacks are coming back with staking and a burn, but they've been paused since April because, like I said, the Kelp hack left a hole on Aave and the treasury is still paying back a loan of up to 30,000 ETH to help fill it.

And until there is a size, a date, and a vote, then the coin you're holding is waiting on all of that. And that leaves you with three decisions. Where does your Aave actually sit? On an exchange or somewhere you hold the keys? Second, is it earning anything while you wait and do you know who's paying it?

And third, at what point would you move in or out? Because if you haven't decided the headline will decide for you. So, for me, it's worth knowing your own plan before the vote, whatever the vote is. All right, so here's what all of this really shows. A coin can have a real business and a good founder, and you can still end up waiting months and months for the bit that you bought it for.

Most of us have bought on a promise and then sat there not quite sure what we're waiting for. Not because we're daft, but because nobody ever actually sat us down and showed us how to follow all of the money, did they? And if they did, then tell me in the comments. Tell me I'm wrong. But, I'm not going to tell you what to do with your bag in the video because I don't know your situation.

That depends on what you're holding and also how are you set up. But, you don't have to work it out on your own. Not anymore. All right, the thing is it's not hard to start and get help. Our private intelligence network is literally for you guys.

Most of what I bring you on this channel comes from inside it. And in there, it goes a lot deeper than I can in one video. Basically, the research team, they dig into where this is heading and members hear it first, right? They'll show you how to get what you're already holding instead of just sat there waiting on a vote. And they're going to help you get it on your own keys so no bank or exchange can freeze it.

And every single week there's a call where the team walks you through how they're reading it and also when they're buying and taking profit themselves. So, you're not guessing. And everyone in there is holding a decent bag, right? And it they're holding in it for the long haul, same as you and me. Honestly, I'd be a lot further on myself if I did start Altcoin Pro sooner.

And if you ran that check earlier and you couldn't say where your payouts come from, then the same thing a lot of Celsius customers didn't say in 2022 when that happened, it's exactly what the free 15-minute call is for. All right, if you're waiting on your money to finally do something on its own kind of stress, and it's worse when every single headline tells you something different about what to do in the meantime, then you need to hear this. One of our members, Robert, put it better than I could. This is a real review, by the way, right? He actually left it on Trustpilot.

It's marked on Prompt as you can look it up. He says, "It's like having five friends who know crypto inside out that you can ring anytime for an answer you can truly trust." If you've ever been scared to make a decision because you didn't know what to believe, he says that that's not a problem anymore for him. All right, results like Robert's are exceptional, and yeah, they didn't happen by sitting still. So, be exceptional. So, guys, you can leave it and hope this thing works out and try piece it together yourself at midnight stressing out reading treasury reports line by line on your phone like a lot of people do.

I'd rather you just spend 15 minutes with the team and came away with a plan, or you just decided this isn't for you. All right, it's free, and worst case you come away clearer. So, here's what I do. Tap more under this if you're on your phone because the link will pop up first. If not, just go to hit that first link in the description.

Guys, I make videos because I've learned how to research the right things. You can do that, too, and then you don't need to watch me. All right, so hit that, guys. As always, stay bullish. Oh.

[music]