Coinspeaker Massive AAVE Whale Buying Leads to 45% Outperformance over Broader Crypto Market
AAVE whales have turned active recently leading to a strong rally in AAVE price with 45% gains on the monthly chart. As of press time, AAVE is trading at $134.24 with a market cap of just over $2 billion.
As per the recent data from LookonChain, a significant buying spree has been reported with a whale spending 4,000 $stETH worth a staggering $10.4 million in order to purchase 77,270 $AAVE tokens at $135 each within a single day. This shows that the whale interest has continued despite a strong rally over the last month.
Crazy buying of $AAVE!
This whale spent 4,000 $stETH($10.4M) to buy 77,270 $AAVE at $135 in just 1 day!
Address:0xa923b13270f8622b5d5960634200dc4302b7611e pic.twitter.com/jSMKOiTT0Z
â Lookonchain (@lookonchain) August 22, 2024
With its current performance over the last month, AAVE has outperformed all of the top 100 cryptocurrencies by market cap including giants like Bitcoin and Ether. The investor interest in AAVE is so strong that Heliumâs HNT, even with 26% gains last month, is still far.
Last month in July, Marc Zeller, founder of the Aave-Chan Initiative, proposed a fee switch for distributing a portion of the platformâs net excess revenue to key ecosystem participants and buying back tokens from the secondary market. This proved to be the major catalyst behind the AAVE price rally. Speaking to CoinDesk, Joshua de Vos, research lead at London-based digital assets data and index provider CCData said:
âThere has been speculation that AAVE could activate their âfee switchâ to redistribute excess revenue generated by the platform to stakers. This follows a proposal aimed at seeking governance feedback on the protocolâs potential to buy back tokens using surplus revenue and redistribute them to AAVE stakers and the minters of their stablecoin, GHO. This has boosted market sentiment around the project, with the possibility of new incentives for holding and staking AAVEâ.
Reforming AAVE Liquidation Process
Furthermore, a new proposal seeks to reform the existing âseize and sellâ loan liquidation process which hasnât been good for the AAVE price action. The proposed reform suggests replacing this mechanism with a âseize and burnâ strategy, having the aim to use AAVEâs GHO stablecoin and aTokens that represent assets deposited in the protocol.
Katie Talati, head of research at Arca, indicated that this proposal, known as the Umbrella proposal, could alleviate sell-side pressures on the AAVE market. She said:
âThe proposal aims to create a new system, called Umbrella, which would use a variety of assets to cover âbad debtâ in the protocol (when a position is liquidated and the collateral does not cover the cost of liquidation) versus only using the AAVE token to cover bad debt. The new system, therefore, would relieve some of the sell pressure on AAVEâ.
Web3 agency Deelabs stated that implementing buyback can lead to substantial bullish pressure on AAVE and the Umbrella proposal can mitigate the negative effects on AAVE price due to loan liquidations. These initiatives that seek to revamp AAVEâs tokenomics and boost the protocolâs risk management have led to significant institutional interest in the token.
In addition, Aave has led the industry in revenue and fees earned over the past four weeks. Data from TokenTerminal shows that Aave has generated over $27 million in fees, surpassing other lending and borrowing protocols.
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Massive AAVE Whale Buying Leads to 45% Outperformance over Broader Crypto Market