Rumors drive Aave token price lower
The price of Aave’s native token AAVE fell more than 8% on Saturday, dropping from around $385 to a low of $339 before rebounding near $352. The decline followed circulating rumors that World Liberty Financial (WLFI), a DeFi platform backed by members of former US president Donald Trump’s family, would alter its governance token allocation to Aave.
Blockchain reporter Colin Wu dismissed the claim, citing a statement from WLFI’s team denying the rumor that Aave would receive 7% of WLFI’s total supply.
Governance proposal resurfaces
The controversy stems from an October 2024 WLFI governance proposal suggesting Aave’s decentralized autonomous organization (DAO) would receive 7% of WLFI’s circulating supply and 20% of protocol revenues from WLFI’s deployment on Aave v3.
Aave founder Stani Kulechov referred to the deal as “the art of the deal,” hinting that the proposal’s terms may still hold relevance despite WLFI’s denial.
Growing DeFi interest and institutional involvement
The rumors come at a time when DeFi is witnessing renewed momentum. According to DeFiLlama, the sector’s total value locked (TVL) stands at more than $167 billion, approaching its December 2021 peak of $212 billion.
Following the 2024 US elections, optimism about a friendlier regulatory climate has driven fresh institutional participation. Asset managers, banks, and corporations are entering the DeFi space, sparking both optimism and concerns about government oversight and potential institutional capture of decentralized protocols.
