In this article, we look at the latest relevant news regarding the Aave project, a decentralized lending crypto protocol with 37 billion TVL.
Among the hottest topics is the introduction of a new rate modification policy and the presentation of a particularly risky governance proposal.
Finally, let’s take a look at the chart structure of the AAVE token and see what the possible price scenarios are for 2025.
Full details below.
The founder of Aave considers the “fee switch” to improve the management of his crypto
A few days ago, Stani Kulechov, founder of the famous crypto project Aave, expressed his intention to activate a “fee change” initiative for the protocol. We are talking about a mechanism which aims to improve the efficiency of the platform’s revenue by investing part of the fees collected.
Generally, these proposals end up rewarding holders of the platform’s native token, in this case AAVE, given the way in which capital is distributed.
It is estimated that, if the fee change is truly integrated, a portion of the revenue will be offered as a “dividend” to crypto holders/stakeholders or used for market redemption.
The Aave protocol is in a strong financial positionand it can afford to allocate some of the new revenue to more aggressive investment strategies.
Its treasury holds nearly $100 million in non-native assets, including stablecoin, Ethereum, and other cryptocurrencies.
Also considering the AAVE crypto itself, the treasure well exceeds 328 million dollarsaccording to what is reported by TokenLogic.
Regarding the proposed fee change, Marc Zeller, founder of Aave Chan, who was an early contributor to the plan, weighed in.
The expert highlighted how Aave’s net revenue far exceeds operating expenses, making this move not only feasible but also speculatively strategic.
These are his words in a post on X
“When the protocol treasury is presented this way and the DAO net revenue is more than double the Opex (incentives included), the fee change is not an if; It’s a when.”
Composition of the Aave Treasury. Source: LogicToken
The new governance proposal to unify the price feeding of USDe and USDT
Another very important situation for Aave concerns the new governance proposal put forward by Chaos Labs and LlamaRisk on January 3.
Both Aave DAO members suggested align the price of USDe (Ethena protocol stablecoin) with that of USDT in their own price feeds.
This means that the oracle in charge, namely Chainlink, should encode the price of USDe as if it were the Tether stablecoin, thus limiting the risks of market fluctuations.
We recall that the first currency has direct exposure to derivative products and digital assets such as Ethereum and Bitcoin while it is not backed by fiat reserves.
In this case, the risk of deindexing is much higher than that of coins like USDT or USDC, which have guarantees that can cover deposits 100%.
The objective of the proposal is precisely to ensure that users do not suffer from possible temporary dropouts in USDe.benefiting from price stability.
In this way, those who use the crypto protocol reduce the risk of being liquidated in the event of high volatility.
The proposal reads:
“By directly tying the value of USDe to USDt, we align the sUSDe oracle with USDt prices, ensuring smooth integration and avoiding disruptions caused by temporary fluctuations in USDe prices.”
In any case, the Aave community does not seem to have taken the news well, proposing a very negative feedback to the governance proposal.
According to what is written on the DAO forum, many users have complained about the risks associated with this initiative, which seems to be of giant scale for Aave.
Essentially, the underlying risk factors of USDe are being referred to by Ethena, which do not appear to have been taken into account by Chaos Labs and LlamaRisk.
One user in particular, Hazbobo, said that coding USDe with USDT seems a bit risky since the former is not even considered a stablecoin.
Additionally, the proposal does not evaluate the best and worst case scenario, making the entire discussion somewhat unreliable.
AAVE Cryptocurrency Price Analysis: Where Are We Going?
The Aave crypto is coming out of a super positive phase, with a performance of 78% in December which made it one of the most attractive DeFi coins of the moment.
The Lending Protocol token appears to have taken off right after the US presidential elections, even reaching the $390 level.
From there, the bulls faced downward pressure from the bears, which pushed AAVE below $300 amid the chart retracement.
Now the 31st cryptocurrency on the market is priced at $337, waiting to find out what the direction will be in the first quarter of the year.
As an indication, the odds are in favor of an appreciation of the AAVE, which should continue its bullish run towards new highs.
Quotes are still far from the daily EMA50 and market volumes remain quite high, demonstrating buyer activity.
Additionally, the new fee change policy, if implemented, will give more value to AAVE crypto, its use cases and/or removing supply from the market.
We expect that in the coming weeks AAVE will break the $400 resistance, aiming for new price horizons.
To the joy of shortists, we point out that there could also be possible bearish scenarios for the price of the currency.
We indeed notice a large bearish divergence on the RSI between the values of December 13 and those of today: while the index indicates a decline, prices have moved sideways.
It should then be added that, in the event that even Bitcoin and Ethereum record withdrawals, AAVE would also be involved, ruining the bull’s plans.
Assuming a price contraction, we can expect AAVE below the 50-period moving average, between $280 and $240.
