$AAVE Soars 26% in a Week Amid Short Squeeze

Aave's token price has experienced an aggressive expansion in trading activity, reaching new highs as it pushes toward $190.

The surge is not isolated to market sentiment alone. Aave V4 surpassed $1 billion in deposits during September and expanded to Arc and Base, introducing an Equities Hub where tokenized Coinbase equities can serve as collateral.

Tokenomics also play a role in the increase. The Aave DAO operates a buyback program with a $50 million annual budget, purchasing between $250,000 and $1.75 million of $AAVE weekly depending on market conditions.

The recent discussion around potentially adding a token-burning mechanism to Aavenomics has given traders another scarcity narrative to price in. However, no formal burn proposal or schedule has been established.