Key Takeaways
- AAVE dropped 10% after a whale dumped 230,350 tokens.
- The selloff comes amid an ongoing governance dispute.
- Aave Labs is accused of attempting to force through a vote without allowing time for discussion.
Aave’s price dropped roughly 10% late on Sunday, Dec. 21, after a whale address sold 230,350 AAVE for around $37.6 million.
The timing of the selloff comes amid an ongoing governance drama sparked by Aave Labs’ attempt to rush through a proposal to transfer brand assets to Aave’s decentralized autonomous organization (DAO).
AAVE Crashes Following Whale Dump
In the space of around three hours, the whale sold their entire AAVE holdings, swapping the tokens for stETH and WBTC.
Between 9:30 p.m. and 11:00 p.m. (UTC), AAVE crashed nearly 10% from $176.5 to $159. By Monday morning, the token had settled at around $161.
The fact that a single actor was able to move the market so much suggests the kind of thin liquidity more commonly associated with memecoins.
Yet, with a market capitalization of $2.46 billion, Aave is one of the top forty cryptocurrencies.
Volatility may stem from the timing of the selloff, which coincided with heightened uncertainty around the project’s governance.
Governance Vote Sparks Uncertainty
At the center of the controversy is a proposal authored by Ernesto Boado, a long-standing contributor to the Aave ecosystem who previously served as Aave Labs’ CTO.
On Dec. 16, Boado introduced a governance proposal seeking to transfer control of Aave’s brand assets—including domains, social media handles, and naming rights—from service providers to a DAO-controlled entity.
However, when Aave founder Stani Kulechov announced that the proposal had been submitted to a Snapshot vote, he was accused of rushing it through without giving the community sufficient time to consider.
In a post on X, Boado distanced himself from the decision, which he says was made without his consent.
“It was not my intention to submit the vote while the community was still having a healthy discussion around it […] Trying to rush a vote is disgraceful,” he said.
With Boada and others calling for the community to abstain from the vote, uncertainty surrounding whether the proposal will pass, fail, or be rewritten has added to market anxiety.
Some observers have even speculated that it played a role in the whale’s decision to exit such a large position at once.
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James Morales is CCN’s blockchain and crypto policy reporter. He has been working in the news media since 2020, writing about topics such as payments, banking and financial technology. These days, he likes to explore the latest blockchain innovations and the evolving landscape of global crypto regulation.
With an educational background in social anthropology and media studies, James uses his platform as a journalist to explore how new technologies work, why they matter and how they might shape our future.
