Aave, a decentralized finance (DeFi) protocol's token, has fallen over 10% in the past 24 hours amid uncertainty regarding token allocation from World Liberty Financial (WLFI).
Escalating Partnership Rumors
Rumors that Aave would receive 7% of WLFI tokens were denied by WLFI representatives, who labeled them as 'false news.' These discussions were sparked by a WLFI community proposal published in October 2024, suggesting that Aave would receive 7% of WLFI governance tokens and 20% of the protocol's revenue.
Market Reaction to Statements
Following the denial of rumors, Aave's token dropped from around $385 to $339, recovering slightly to $352 according to TradingView data. Aave founder Stani Kulechov referred to the proposal as 'the art of the deal,' but noted that discussions are ongoing.
Increasing Interest in DeFi After U.S. Elections
Interest in DeFi is rising amid expectations of friendlier regulations in the U.S. after the 2024 elections. The total value locked in DeFi has increased to $167 billion, nearing the record high of $212 billion reached in December 2021, according to DefiLlama data.
The situation surrounding Aave and WLFI highlights the dynamics and volatility within the DeFi sector, as well as the growing interest from investors against the backdrop of regulatory changes in the U.S.
