The post Aave Power Struggle Triggers $500M Market Cap Slide appeared on BitcoinEthereumNews.com. Home » Crypto News The dispute centered on swap fees routed toThe post Aave Power Struggle Triggers $500M Market Cap Slide appeared on BitcoinEthereumNews.com. Home » Crypto News The dispute centered on swap fees routed to

Aave Power Struggle Triggers $500M Market Cap Slide

5 min read

Home » Crypto News


The dispute centered on swap fees routed to Aave Labs, reviving tensions over who captures value in supposedly decentralized protocols.

‘;
}

function loadTrinityPlayer(targetWrapper, theme,extras=””) {
cleanupPlayer(targetWrapper); // Always clean first ✅
targetWrapper.classList.add(‘played’);
// Create script
const scriptEl = document.createElement(“script”);
scriptEl.setAttribute(“fetchpriority”, “high”);
scriptEl.setAttribute(“charset”, “UTF-8”);

const scriptURL = new URL(`https://trinitymedia.ai/player/trinity/2900019254/?themeAppearance=${theme}${extras}`);
scriptURL.searchParams.set(“pageURL”, window.location.href);

scriptEl.src = scriptURL.toString();

// Insert player
const placeholder = targetWrapper.querySelector(“.add-before-this”);
placeholder.parentNode.insertBefore(scriptEl, placeholder.nextSibling);
}

function getTheme() {
return document.body.classList.contains(“dark”) ? “dark” : “light”;
}

// Initial Load for Desktop
if (window.innerWidth > 768) {

const desktopBtn = document.getElementById(“desktopPlayBtn”);
if (desktopBtn) {
desktopBtn.addEventListener(“click”, function () {
const desktopWrapper = document.querySelector(“.desktop-player-wrapper.trinity-player-iframe-wrapper”);
if (desktopWrapper) loadTrinityPlayer(desktopWrapper, getTheme(),’&autoplay=1′);
});
}
}

// Mobile Button Click
const mobileBtn = document.getElementById(“mobilePlayBtn”);
if (mobileBtn) {
mobileBtn.addEventListener(“click”, function () {
const mobileWrapper = document.querySelector(“.mobile-player-wrapper.trinity-player-iframe-wrapper”);
if (mobileWrapper) loadTrinityPlayer(mobileWrapper, getTheme(),’&autoplay=1′);
});
}
function reInitButton(container,html){
container.innerHTML = ” + html;
}

// Theme switcher
const destroyButton = document.getElementById(“checkbox”);
if (destroyButton) {
destroyButton.addEventListener(“click”, () => {
setTimeout(() => {
const theme = getTheme();
if (window.innerWidth > 768) {
const desktopWrapper = document.querySelector(“.desktop-player-wrapper.trinity-player-iframe-wrapper”);
if(desktopWrapper.classList.contains(‘played’)){
loadTrinityPlayer(desktopWrapper, theme,’&autoplay=1′);
}else{
reInitButton(desktopWrapper,’Listen‘)
const desktopBtn = document.getElementById(“desktopPlayBtn”);
if (desktopBtn) {
desktopBtn.addEventListener(“click”, function () {
const desktopWrapper = document.querySelector(“.desktop-player-wrapper.trinity-player-iframe-wrapper”);
if (desktopWrapper) loadTrinityPlayer(desktopWrapper,theme,’&autoplay=1’);
});
}
}
} else {
const mobileWrapper = document.querySelector(“.mobile-player-wrapper.trinity-player-iframe-wrapper”);
if(mobileWrapper.classList.contains(‘played’)){
loadTrinityPlayer(mobileWrapper, theme,’&autoplay=1′);
}else{
const mobileBtn = document.getElementById(“mobilePlayBtn”);
if (mobileBtn) {
mobileBtn.addEventListener(“click”, function () {
const mobileWrapper = document.querySelector(“.mobile-player-wrapper.trinity-player-iframe-wrapper”);
if (mobileWrapper) loadTrinityPlayer(mobileWrapper,theme,’&autoplay=1′);
});
}
}
}
}, 100);
});
}
})();



Summarize with AI



Summarize with AI

Aave’s governance token reportedly lost half a billion dollars in market value in mid-December 2025 as a public conflict between its decentralized autonomous organization (DAO) and the core development team, Aave Labs, rattled investors.

The dispute, detailed in a January 14 report by market intelligence provider Santiment, centered on control of key revenue streams and brand assets and has evolved into a critical test for decentralized governance. However, on-chain data shows that large investors used the panic as a buying opportunity.

Governance Clash Shakes Confidence, Then Steadies

According to Santiment, the tension traces back to early December, when DAO members noticed that swap fees tied to a new CoW Swap integration on Aave were being routed to an address controlled by Aave Labs rather than the DAO treasury.

Previously, similar fees had flowed to token holders, creating expectations around shared upside. However, Aave Labs defended the change as revenue from a product it funded independently, causing the disagreement to quickly grow into a broader debate over governance rights, value capture, and control of the Aave brand.

Discussion peaked between December 11 and December 22, 2025, as proposals emerged seeking to move Aave’s intellectual property and branding assets under DAO control. The vote, pushed to Snapshot during the holiday period, drew criticism for timing and process, with major market participants, including Wintermute, publicly opposing the alignment plan. Wintermute CEO Evgeny Gaevoy wrote on December 26 that the proposal lacked clarity and risked deepening political infighting rather than fixing long-term incentives.

As uncertainty spread, AAVE’s price slid about 15% at its worst point, contributing to the roughly $500 million drop in market capitalization. Still, Santiment noted that fundamentals stayed firm, with deposits on the protocol going up around 60% year over year and weekly revenue reaching record levels in late 2025.

Whale Accumulation and Price Action Point to Cautious Optimism

While retail interest cooled during the dispute, large holders moved the other way. Data cited by Santiment shows the top 100 AAVE addresses lifting their share of supply from about 72% to 80% through December. Exchange balances also fell, a sign that tokens were being pulled into long-term storage rather than prepared for sale.

You may also like:

Meanwhile, whale transaction counts stayed muted, suggesting steady accumulation instead of frantic trading. That shift coincided with a change in tone in early January, after Aave Labs said it would explore sharing revenue generated outside the core protocol with token holders.

Sentiment metrics tracked by the analytics platform flipped more positive by January 13, 2026, reaching their strongest bullish-to-bearish ratio since before the dispute.

Price action is also reflecting that stabilizing mood. At the time of writing, AAVE was trading around $178, up nearly 5% in the last 24 hours and just over 4% on the week, although it remains down more than 9% over the past month and 38% year over year.

For many long-term holders, the saga has become a stress test rather than a breaking point, and with Aave Labs outlining an ambitious 2026 roadmap and governance talks still ongoing, the coming months will show whether this uneasy truce turns into a clearer model for power and profit in the DeFi protocol.

SPECIAL OFFER (Exclusive)

SECRET PARTNERSHIP BONUS for CryptoPotato readers: Use this link to register and unlock $1,500 in exclusive BingX Exchange rewards (limited time offer).

Source: https://cryptopotato.com/report-aave-power-struggle-triggers-500m-market-cap-slide/

Market Opportunity
AaveToken Logo
AaveToken Price(AAVE)
$127.84
$127.84$127.84
-0.89%
USD
AaveToken (AAVE) Live Price Chart
Disclaimer: The articles reposted on this site are sourced from public platforms and are provided for informational purposes only. They do not necessarily reflect the views of MEXC. All rights remain with the original authors. If you believe any content infringes on third-party rights, please contact [email protected] for removal. MEXC makes no guarantees regarding the accuracy, completeness, or timeliness of the content and is not responsible for any actions taken based on the information provided. The content does not constitute financial, legal, or other professional advice, nor should it be considered a recommendation or endorsement by MEXC.

You May Also Like

Which Altcoins Stand to Gain from the SEC’s New ETF Listing Standards?

Which Altcoins Stand to Gain from the SEC’s New ETF Listing Standards?

On Wednesday, the US SEC (Securities and Exchange Commission) took a landmark step in crypto regulation, approving generic listing standards for spot crypto ETFs (exchange-traded funds). This new framework eliminates the case-by-case 19b-4 approval process, streamlining the path for multiple digital asset ETFs to enter the market in the coming weeks. Grayscale’s Multi-Crypto Milestone Grayscale secured a first-mover advantage as its Digital Large Cap Fund (GDLC) received approval under the new listing standards. Products that will be traded under the ticker GDLC include Bitcoin, Ethereum, XRP, Solana, and Cardano. “Grayscale Digital Large Cap Fund $GDLC was just approved for trading along with the Generic Listing Standards. The Grayscale team is working expeditiously to bring the FIRST multi-crypto asset ETP to market with Bitcoin, Ethereum, XRP, Solana, and Cardano,” wrote Grayscale CEO Peter Mintzberg. The approval marks the US’s first diversified, multi-crypto ETP, signaling a shift toward broader portfolio products rather than single-asset ETFs. Bloomberg’s Eric Balchunas explained that around 12–15 cryptocurrencies now qualify for spot ETF consideration. However, this is contingent on the altcoins having established futures trading on Coinbase Derivatives for at least six months. This includes well-known altcoins like Dogecoin (DOGE), Litecoin (LTC), and Chainlink (LINK), alongside the majors already included in Grayscale’s GDLC. Altcoins in the Spotlight Amid New Era of ETF Eligibility Several assets have already met the key condition, regulated futures trading on Coinbase. For example, Solana futures launched in February 2024, making the token eligible as of August 19. “The SEC approved generic ETF listing standards. Assets with a regulated futures contract trading for 6 months qualify for a spot ETF. Solana met this criterion on Aug 19, 6 months after SOL futures launched on Coinbase Derivatives,” SolanaFloor indicated. Crypto investors and communities also identified which tokens stand to gain. Chainlink community liaison Zach Rynes highlighted that LINK could soon see its own ETF. He noted that both Bitwise and Grayscale have already filed applications. Meanwhile, the Litecoin Foundation indicated that the new standards provide the regulatory framework for LTC to be listed on US exchanges. Hedera is also in the spotlight, with digital asset investor Mark anticipating an HBAR ETF. Market observers see the decision as a potential turning point for broader adoption, bringing the much-needed clarity and accessibility for investors. At the same time, it boosts confidence in the market’s maturity. The general sentiment is that with the SEC’s approval, the next phase of crypto ETFs is no longer a question of ‘if,’ but ‘when.’ The shift to generic listing standards could expand the US-listed digital asset ETFs roster beyond Bitcoin and Ethereum. Such a move would usher in new investment vehicles covering a dozen or more altcoins. This represents the clearest path yet toward mainstream, regulated access to diversified crypto exposure. More importantly, it comes without the friction of direct custody. “We’re gonna be off to the races in a matter of weeks,” ETF analyst James Seyffart quipped.
Share
Coinstats2025/09/18 12:57
‘High Risk’ Projects Dominate Crypto Press Releases, Report Finds

‘High Risk’ Projects Dominate Crypto Press Releases, Report Finds

The post ‘High Risk’ Projects Dominate Crypto Press Releases, Report Finds appeared on BitcoinEthereumNews.com. More than six in 10 crypto press releases published
Share
BitcoinEthereumNews2026/02/04 13:09
Why Vitalik Says L2s Aren’t Ethereum Shards Now?

Why Vitalik Says L2s Aren’t Ethereum Shards Now?

The post Why Vitalik Says L2s Aren’t Ethereum Shards Now? appeared on BitcoinEthereumNews.com. Vitalik says Ethereum’s scaling and higher gas limits mean L2s no
Share
BitcoinEthereumNews2026/02/04 13:18