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TOKEN ECONOMICS

AAVE's price jumped on talk of burning tokens

Aave's founder said a token burn is being considered. Burning permanently removes tokens from circulation, but no amount, funding plan, schedule or governance proposal has been published.

By Lorde BuildsOctober 1, 2026 · 3 min readUpdated September 30, 2026
AAVE's price jumped on talk of burning tokens. Forest-green headline on cream beside the official Aave icon and a speech bubble facing a blank proposal page.
Generated editorial artwork with Aave's official icon composited for identification. The blank page represents the proposal that has not been published.

Aave is a crypto lending protocol. AAVE is the token used to help govern it.

On September 28, founder Stani Kulechov said Aave is considering permanently removing some AAVE tokens from circulation. Crypto projects call this a token burn.

CoinDesk reported AAVE’s price up 11% while the comment circulated. Traders moved before Aave had published how many tokens could be burned, how it would pay for them, when it could happen or the proposal holders would vote on.

What Aave’s founder actually said

Kulechov said a burn is being considered for “Aavenomics 3.0”, the name used for a future update to Aave’s token-economics plan.

His post established that the idea is under consideration. It did not announce a finished plan:

The founder raised the idea. He did not give an amount, funding method, schedule or proposal. Original post.

What burning tokens means

A token burn permanently removes tokens from usable supply.

Imagine that 100 tokens can be traded. If 5 are permanently removed, 95 remain. If demand stays the same, a smaller supply can make each remaining token more scarce.

That does not guarantee a higher price. The result also depends on demand, how many tokens are removed and what the project gives up to remove them.

The missing plan changes the meaning

There is more than one way Aave could burn tokens:

  • It could destroy tokens already held by a treasury.
  • It could spend protocol revenue to buy AAVE from traders and then destroy it.
  • It could create a recurring rule that removes tokens over time.

Those choices do different things. Buying tokens first creates market demand, but it also spends money that could have been used elsewhere. Destroying tokens the treasury already controls reduces recorded supply without creating the same purchase demand.

No public Aavenomics 3.0 proposal found in our search chose among those options. Aave’s normal governance process moves from discussion to a formal proposal, a holder vote and then execution.

What traders should watch next

  • Size: how much AAVE would be burned?
  • Funding: protocol revenue, treasury tokens or another source?
  • Timing: one transaction or a recurring rule?
  • Approval: which proposal would holders vote on?
  • Tradeoff: what other use of the same funds would holders give up?

Until those details arrive, AAVE’s price move shows that traders like the idea. It does not show that a burn has been designed, approved or executed.

Sources and reporting notes

Checked September 30, 2026. The burn consideration comes from Kulechov’s original reply. CoinDesk reported the 11% reaction within a broader rising DeFi market. The proposal stages come from Aave’s governance documentation.

The governance search was bounded and cannot prove that no unpublished work exists. Market prices change quickly, and the full move cannot be assigned to one post alone. This article explains the expectation gap, not a trading recommendation.