Aave’s native token has gained value after Chainlink’s proposed SVR integration. Chainlink’s Smart Value Recapture (SVR) system aims to ensure that MEV profits from liquidations are distributed more fairly to protocol participants. This proposed integration has led to a surge in AAVE’s price, with the token rallying on strong buy signals.
AAVE’s Rise and the Increase in Technical Indicator RSI$AAVE
AAVE, the native token of decentralized finance (DeFi) protocol Aave, has gained 12% in the past 24 hours. The increase comes after Chainlink proposed a new oracle integration. At the time of writing, AAVE is trading at $369.10, approaching its three-year high of $399.85.
On December 23, Chainlink introduced its Smart Value Recovery (SVR) system, an oracle solution that aims to capture profits generated by Maximum Extractable Value (MEV) and distribute them back to DeFi protocols. Following this announcement, a community member submitted a temporary check proposal on Aave’s governance forum to discuss the SVR integration.
The proposal notes that liquidators and seekers often make disproportionate profits during Aave’s liquidation processes. By integrating Chainlink’s SVR system, MEV from Aave liquidations can be recaptured and this profit can be distributed more fairly among all protocol participants.
This recommendation caused a significant increase in AAVE’s trading volume. Over the past 24 hours, the price has risen by double digits, with open interest increasing by 32% to $376 million. Open interest refers to the total amount of contracts that have not yet been closed in the derivatives market. As with AAVE, an increase in open interest during a price rally indicates that traders are opening new positions, which is a sign of strong market confidence and continued momentum.
The Relative Strength Index (RSI) on the daily chart of AAVE is indicating an uptrend and is indicating buying activity. The RSI is currently at 62.88. This indicator reflects that market participants are buying more of AAVE, meaning the uptrend is strong.
AAVE is currently trading at a three-year high of $399.85, and if buyers continue to accumulate, it could break out of this level and form support. In this case, AAVE’s price could rise above $400 for the first time since 2021. However, if selling pressure begins, this bullish view will be invalidated and the price could possibly drop to $323.46.