The Aave token surged 46% over the past four weeks, driving its price from $94.41 to $139. This price surge has outperformed other top 100 cryptocurrencies by market value, including Bitcoin (BTC) and Ethereum (ETH).
Aave Token Growth
On-chain data shows that AAVE’s open interest (OI) and daily active addresses are rising, signaling the continuation of its bullish trend. AAVE’s OI rose from $106.24 million on Monday to $191.16 million on Thursday, the highest OI since the start of this year. Currently, AAVE’s open interest stands at $173.05 million.
Impact of New Proposals
Investor interest in the Aave token began in late July, following a proposal by Aave-Chan Initiative founder Marc Zeller to allocate a share of the platform’s net earnings to key ecosystem participants and adjust fees for repurchasing AAVE from the secondary market. Another proposal that triggered the investor rally for AAVE was the 'Umbrella' Initiative, aimed at shifting from the 'seize and sell' liquidation mechanism to 'seize and burn.' According to Katie Talati, head of research at Arca, this new 'Umbrella' project would help alleviate market pressures on selling AAVE and manage risky loans.
Tokenomics Update and Its Consequences
Web3 agency Deelabs remarked on the new proposals, stating that buybacks would result in positive market pressure, adding that the Umbrella offering would reduce the adverse effects on AAVE price during loan liquidations. The algorithmic trading firm Wintermute also noted that the proposals aimed to revamp AAVE’s tokenomics and risk management, which significantly contributed to rallying investors to AAVE.
These two proposals fueled investor enthusiasm, leading to AAVE's price surge by 46%. Over the same period, Helium's HNT was the closest rival with a 26% price gain. AAVE also generated over $27 million in fees, outperforming other lending and borrowing protocols.
Comments