Aave, the governance token of the decentralized finance (DeFi) Aave protocol, experienced a 17% decline between July 30 and August 1, reaching the $62 level.
While the $62 support has demonstrated its resilience, the current price of $64.40 is still 12% below the daily close on July 30. Investors are now questioning whether this movement signifies a more cautious approach to the sector or if other factors are exerting pressure on the Aave (AAVE) token price.
Part of the recent movement in the AAVE token can be attributed to the risks of cascading liquidations on DeFi protocols resulting from the Curve Finance pool exploit that commenced on July 30. However, Aave’s decentralized liquidity protocol has successfully survived previous identical scenarios, and the protocol has a substantial $295.6 million deposited in its Safety Module.
Notably, Michael Egorov, the founder of Curve, currently holds a substantial $76.6 million loan backed by 357.3 million Curve DAO (CRV) tokens across three DeFi applications, as reported by Delphi Digital. This represents 40.5% of the entire CRV circulating supply and poses risks to the ecosystem, raising concerns about potential liquidation repercussions on major…
