$AAVE , the native token of the decentralized finance (DeFi) lending protocol Aave, has experienced a 12% price surge in the past 24 hours. This rally comes amid discussions about integrating Chainlink’s new Smart Value Recapture (SVR) oracle service. Currently trading at $369.10, AAVE is nearing its three-year high of $399.85.
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Chainlink’s SVR: Revolutionizing Value Capture in DeFi
On December 23, Chainlink introduced Smart Value Recapture (SVR), an oracle service designed to optimize value distribution in DeFi ecosystems. SVR focuses on capturing profits generated through Maximum Extractable Value (MEV) and redistributing them to benefit all protocol participants.
In response to this launch, a proposal was submitted on Aave’s governance forum to integrate SVR into the protocol. The proposal addresses the issue of disproportionate profits earned by liquidators and searchers during Aave’s liquidation process. By implementing SVR, MEV profits would be recaptured and equitably distributed among searchers, builders, and the Aave protocol, enhancing overall user value.
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AAVE’s Trading Activity Spikes
The proposal has sparked renewed interest in AAVE, leading to a significant uptick in trading activity. Over the past 24 hours, AAVE’s price climbed sharply, accompanied by a 32% rise in open interest, which now stands at $376 million.
Open interest reflects the total number of active contracts in the derivatives market that have not been settled. A rise in this metric during a price rally suggests that traders are opening positions aligned with the upward movement, signaling strong market confidence.
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Technical Indicators Signal Strength
AAVE’s technical indicators also support the bullish sentiment. On the daily chart, the Relative Strength Index (RSI), which measures buying and selling momentum, is currently at 62.88 and trending upward. This suggests sustained buying pressure, as the market leans toward overbought conditions.
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AAVE Price Forecast: Can It Break $400?
AAVE is currently trading just below its resistance level of $399.85, the token’s three-year high. If buying momentum continues, AAVE could break through this resistance, turning it into a support level and pushing its price above $400—a milestone it hasn’t reached since 2021.
However, the bullish outlook depends on sustained demand. A wave of sell-offs or profit-taking could lead to a price reversal, potentially driving AAVE down to $323.46.
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Conclusion
The proposed integration of Chainlink’s SVR could significantly enhance value distribution within the Aave protocol, fueling optimism in the market. As discussions progress and market dynamics evolve, AAVE’s trajectory will likely remain a focal point for traders and investors in the DeFi ecosystem.
