AAVE surged nearly 19% to $355 over the past 24 hours, leading the top 40 cryptocurrencies by percentage daily gain as investors responded to its recent Aptos expansion and Federal Reserve Chair Jerome Powell’s dovish remarks.
What Aave is and why it matters
Aave is a decentralized finance protocol that lets users lend and borrow cryptocurrencies without intermediaries. Loans are managed by smart contracts, with borrowers required to post collateral valued above their loans.
The AAVE token underpins this system. It can be staked to support security and earn rewards, used as collateral for borrowing, and grants holders governance rights. In return, tokenholders gain voting power and fee benefits, making AAVE central to protocol operations.
Aptos expansion
On Aug. 21, Aave Labs announced that Aave V3 had gone live on Aptos, its first deployment on a non-EVM blockchain. Developers rewrote the codebase in the Move language, rebuilt the user interface, and adapted the protocol for the Aptos virtual machine.
The launch was supported by audits, a mainnet capture-the-flag competition, and a $500,000 bug bounty. The first market supports assets including APT, sUSDe, USDT, and USDC, with supply and borrow caps to be raised gradually. Risk assessments were conducted, and price feeds were provided.
Aave Labs founder and CEO Stani Kulechov called the launch “an incredible milestone,” highlighting the shift beyond EVM chains after five years of exclusivity.
Jerome Powell’s Jackson Hole speech
Fed Chair Jerome Powell’s speech on Friday morning at the Jackson Hole Economic Policy Symposium added momentum. Powell said the balance of risks between inflation and employment had shifted, signaling that interest rate cuts could begin in September.
Markets viewed his remarks as dovish, with expectations for a quarter-point cut in September rising significantly. U.S. equities and crypto have rallied broadly since Powell’s speech, with AAVE among the biggest movers.
WLFI exposure resurfaces
Another factor analysts say may not be fully priced in is Aave’s stake in World Liberty Financial (WLFI). In October 2024, WLFI proposed launching its own Aave V3 instance on Ethereum mainnet. As part of the arrangement, AaveDAO was allocated 20% of WLFI’s protocol fees and 7% of its governance tokens.
Simon, an analyst at Delphi Digital, noted that with WLFI’s token set to begin trading at a significant valuation, Aave’s allocation could be worth around $1.9 billion — more than a third of its current valuation. He argued that this exposure may be contributing to AAVE’s rally, even if investors are only now revisiting its significance.
Technical analysis highlights
- According to technical analysis data, AAVE posted significant gains during the 24-hour trading period from Aug. 22 at 12:00 UTC to Aug. 23 at 11:00 UTC, climbing from $297.75 to $353.22 — an 18.65% increase that reflects growing confidence in the platform’s expansion strategy.
- The digital asset traded within a $62.11 range, fluctuating between $294.50 and $356.60, with notable price movement occurring when trading volume reached over 340,000 units, significantly exceeding the daily average.
- Sustained buying pressure was observed during the final hour of the analysis period, with AAVE advancing from $349.61 to $353.79.
- Trading volumes consistently exceeded key levels during the session, indicating what market participants describe as methodical institutional positioning.
Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.
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