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Which integration redirected AAVE swap fees?

Aave’s integration with CoW Swap caused controversy when swap fees were directed to a wallet controlled by Aave Labs instead of the Aave DAO treasury. This sparked pushback from the community and a failed governance vote.

  1. Swap fees from CoW Swap went to an Aave Labs wallet, not the DAO treasury CoW Swap.
  2. Previously, ParaSwap integration shared fees with the DAO, making this change controversial ParaSwap contrast.
  3. A governance proposal to transfer brand assets to the DAO was rejected by the community vote outcome.

Deep Dive

1. CoW Swap Fees

Community members noticed that fees from swaps made through Aave’s CoW Swap integration were sent to a wallet controlled by Aave Labs instead of the DAO treasury. This raised concerns because the DAO is supposed to receive revenue to support the protocol and its community Cointelegraph report.

Why it matters: For those tracking Aave (AAVE)’s revenue, where fees are routed—whether to the DAO or a separate entity—can significantly impact how value is shared within the ecosystem.

2. ParaSwap Contrast

Before CoW Swap, Aave’s ParaSwap integration shared fees directly with the DAO. The switch to CoW Swap changed this, potentially diverting up to $10 million annually away from the DAO. This led to accusations that revenue that should benefit the community was being privatized Coinspeaker coverage.

3. Governance Fallout

The fee dispute became part of a larger governance proposal aimed at bringing brand and front-end assets under DAO control. The proposal was rejected, with a majority voting against it and many abstaining. This vote highlighted divisions within the community about how revenue and control should be managed vote details.

Why it matters: While the immediate issue of fee routing was addressed, the broader challenge remains: aligning products developed by Aave Labs with the DAO’s economic interests. This will likely influence future governance decisions and fee policies for Aave (AAVE) on the CoinMarketCap page.

Conclusion

The CoW Swap integration redirected swap fees away from the DAO, sparking a debate over value capture and governance within Aave. The failed governance vote reveals a split community on who should control front-end assets and revenue streams. This ongoing discussion will shape how future integrations are handled and how AAVE’s value is distributed.


What could affect the price of AAVE?

Aave’s future depends on key protocol upgrades, growing interest from institutions, and changes in regulations. However, disagreements within its community and overall market mood could slow down progress.

  1. V4 Upgrade & Real-World Assets Push (Positive)
  2. Bitwise ETF Filings (Mixed Effects)
  3. Governance Conflicts (Negative)

In-Depth Look

1. V4 Upgrade & Real-World Assets (Positive Impact)

Overview:
Aave’s plan for 2026 focuses on launching V4, which will create a cross-chain liquidity hub, and Horizon, a platform for lending using real-world assets (RWA). V4 aims to connect liquidity that’s currently spread across different blockchains. Horizon has already attracted $550 million in tokenized Treasury deposits (Aave Blog). Additionally, the new Aave App, designed for mobile users, could help bring in more everyday users.

What this means:
This technical upgrade could make Aave a key player in institutional decentralized finance (DeFi), handling potentially trillions in assets. Successfully integrating real-world assets, with a goal of over $1 billion by 2026, would help Aave earn revenue beyond just crypto lending.

2. Bitwise ETF Filings & Regulatory Environment (Mixed Effects)

Overview:
Bitwise has applied to launch 11 exchange-traded funds (ETFs) for various altcoins, including AAVE (CoinDesk). However, the U.S. Securities and Exchange Commission (SEC) has yet to approve these. On a positive note, the SEC ended its four-year investigation into Aave in December 2025 without any charges, removing a major uncertainty.

What this means:
If the ETFs get approved, it could open the door for more institutional investors to enter the market—similar to how Solana’s ETF attracted $750 million in 2025. But if the SEC rejects the filings, it could lead to price drops. Meanwhile, Europe’s MiCA regulations provide a more stable environment but may limit how flexible stablecoins can be.

3. DAO Governance & Large Holder Influence (Negative Impact)

Overview:
In December 2025, a vote on brand control within Aave’s decentralized autonomous organization (DAO) was rejected by 55%, highlighting tensions between the founders and the community. At the same time, a large holder (or “whale”) sold 230,000 AAVE tokens, worth about $37 million, causing the price to drop 10% (The Block).

What this means:
These governance struggles could delay important upgrades like V4. Also, since large holders control 58% of voting power (Snapshot), there’s a risk of centralization, which goes against the core principles of DeFi.

Conclusion

Aave’s price will likely be influenced by how well the V4 upgrade rolls out in early 2026 and the outcome of ETF approvals. While expanding into real-world assets and positive regulatory developments offer growth opportunities, ongoing governance issues and broader market trends remain risks. Keep an eye on the March 16 Bitwise ETF decision and Horizon’s total value locked (TVL) growth—success in these areas could reverse the current 48% drop this year. The big question is whether Aave can grow and innovate while staying true to its decentralized roots.


What are people saying about AAVE?

The Aave community is divided between optimism for a technical price recovery and concerns about governance issues. Here’s what’s currently trending:

  1. Conflicting price forecasts – Some analysts predict a rebound to $180-$190, while others warn of a drop to $130
  2. Governance controversy – A dispute over fee management has led to accusations of "stealth privatization" between the DAO and Aave Labs
  3. Key support level – Traders, especially in Germany, are watching the $153.40-$153.48 range closely as a critical support zone

Deep Dive

1. @bpaynews: 14-17% Upside Potential 🟢

"AAVE price prediction suggests 14-17% upside to $179-$183 within 5 days"
– @bpaynews (2K followers · 752K impressions · Dec 27, 2025, 12:00 PM UTC)
View original post
What this means: This is a positive outlook for AAVE. Large investors (whales) are accumulating, and technical indicators like the Relative Strength Index (RSI) show the token is oversold, suggesting a possible price rebound soon.

2. @_madtoshi: Governance Concerns 🔴

"FUD over Aave DAO vs Labs...sentiment understandable"
– @_madtoshi (1.1K followers · 5.2K impressions · Dec 18, 2025, 1:35 AM UTC)
View original post
What this means: This is a negative signal for AAVE. Disputes over how protocol fees are handled—potentially affecting $10 million in annual revenue—are causing uncertainty and shaking confidence among token holders.

3. @FinoraAI_DE: Watching the FVG Support Zone ⚪️

"FVG-Bereich bei 153.40–153.48 wird als kurzfristige Unterstützung hervorgehoben"
– @FinoraAI_DE (659 followers · 1.4K impressions · Dec 28, 2025, 10:53 PM UTC)
View original post
What this means: This is a neutral stance for now. Holding the $153.40 support level could lead to a 5% price bounce, but if the price falls below this zone, it might drop 8% down to $145.

Conclusion

Opinions on AAVE are mixed. Technical traders see potential for a bounce since the token is currently oversold (daily RSI at 37), but concerns about governance issues are weighing heavily on the community. The $145-$153 price range is crucial—closing below this could confirm a bearish pattern, while staying above might signal a recovery supported by large investors. Despite short-term challenges, Aave’s strong fundamentals, including a $35 billion total value locked (TVL) and integration with Chainlink ACE, remain promising for the long term.


What is the latest news about AAVE?

Aave is making progress with regulatory approvals and large investor activity, but it’s also facing some internal governance challenges. Here’s a quick summary of the latest developments:

  1. Bitwise Files 11 Altcoin ETFs (Dec 31, 2025) – Includes AAVE, showing growing institutional interest.
  2. $400M USDT Transferred to Aave (Jan 1, 2026) – A major investor adds liquidity to Aave’s lending pools.
  3. Governance Dispute Between DAO and Labs (Dec 23, 2025) – Controversy over fee management sparks a governance conflict.

In-Depth Look

1. Bitwise Files 11 Altcoin ETFs (Dec 31, 2025)

What happened:
Bitwise Asset Management submitted applications to the U.S. Securities and Exchange Commission (SEC) for 11 new cryptocurrency ETFs, including one for AAVE. These ETFs would hold up to 60% of their assets directly in the actual tokens, combining both direct ownership and derivatives. If approved, expected around March 2026, this could bring billions of dollars into AAVE, similar to how Bitcoin and Solana ETFs have attracted institutional investors.

Why it matters:
Approval of these ETFs would make it easier for large investors and institutions to invest in AAVE, boosting its credibility and adoption in the decentralized finance (DeFi) space. However, the SEC’s approval process is still uncertain and could delay or block these funds. (CoinMarketCap)

2. $400M USDT Whale Transfer to Aave (Jan 1, 2026)

What happened:
A large investor, often called a “whale,” moved $400 million worth of USDT (a stablecoin pegged to the U.S. dollar) from the HTX exchange into Aave’s lending pools. This is one of the biggest deposits into decentralized finance (DeFi) in 2025.

Why it matters:
This big deposit increases Aave’s Total Value Locked (TVL), which is a key measure of how much money is being used on the platform. More liquidity means better lending and borrowing options for users. However, if such large deposits are suddenly withdrawn, it could create risks for the platform’s stability. (CoinMarketCap)

3. Governance Dispute Between DAO and Labs (Dec 23, 2025)

What happened:
Aave Labs, the development team behind Aave, redirected fees earned from a new integration with CoW Swap to private wallets instead of the Aave DAO’s treasury. This move upset the community and delegates, who accused the team of secretly taking control of funds. This led to proposals aiming to take back control of Aave’s intellectual property and brand.

Why it matters:
This conflict has shaken trust in Aave’s decentralized governance model. Following the news, AAVE’s price dropped 18%. However, the founder, Stani Kulechov, bought $5.15 million worth of tokens, helping to stabilize the price. (CCN)

Conclusion

Aave’s future depends on balancing growing institutional interest—through ETFs and large investments—with resolving internal governance issues. Regulatory progress and product improvements like the V4 upgrade and Horizon RWA platform provide a positive outlook. Still, the ongoing power struggle between the DAO and Labs is a major challenge. Will 2026 be the year Aave successfully combines its decentralized principles with effective governance?


What is expected in the development of AAVE?

Aave’s 2026 roadmap centers on three main goals to grow decentralized finance (DeFi) use:

  1. Aave V4 Launch (Q1 2026) – A redesigned system that connects liquidity across multiple blockchains.
  2. Horizon RWA Expansion (2026) – Growing tokenized real-world asset deposits to over $1 billion.
  3. Aave App Full Rollout (Early 2026) – Bringing easy-to-use DeFi access to mobile users.

Deep Dive

1. Aave V4 Launch (Q1 2026)

Overview:
Aave V4 will introduce a new “Hub-and-Spoke” design to bring together liquidity that’s currently spread out across different blockchain networks like Ethereum and Arbitrum. Each blockchain will have a central “Hub” for liquidity, while “Spokes” allow for customized lending markets with their own risk settings. This upgrade aims to support trillions of dollars in assets and make it easier for developers to build on Aave (Aave Governance).

What this means:

2. Horizon RWA Expansion (2026)

Overview:
Horizon is Aave’s platform for institutional investors to deposit tokenized real-world assets (RWA). It currently holds about $550 million, mostly in stablecoins like USDC and RLUSD. Partnerships with companies like Circle, Ripple, and Franklin Templeton aim to grow this to over $1 billion in 2026 by adding tokenized government bonds, credit products, and real estate (CoinMarketCap).

What this means:

3. Aave App Full Rollout (Early 2026)

Overview:
The Aave App, launched in beta on iOS in November 2025, offers a user-friendly experience similar to traditional finance apps, including free stablecoin transfers and balance protection. The full rollout in 2026 aims to reach 1 million users by making DeFi simple and accessible on mobile devices (Aave X post).

What this means:

Conclusion

Aave’s 2026 plan combines technical upgrades (V4), institutional growth (Horizon), and consumer-friendly tools (Aave App) to strengthen its position as a core DeFi platform. Success depends on smooth execution and managing regulatory challenges. Could Aave’s cross-chain liquidity and real-world asset integration change the future of lending beyond just cryptocurrencies?

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What updates are there in the AAVE code base?

Aave is making big improvements with its V4 update, focusing on stronger security and expanding across different blockchains.

  1. V4 Security & Testing (October 2025) – Completed thorough audits and over 900 tests to ensure stability and safety.
  2. Horizon RWA Launch (August 2025) – Launched the first Ethereum-based market for lending against real-world assets.
  3. Aptos V3 Deployment (August 2025) – Expanded to a new blockchain (Aptos) with $1 million limits per asset.

Deep Dive

1. V4 Security & Testing (October 2025)

Overview: Aave’s V4 update went through intense security checks, including reviews by four different firms and formal verification to prove key parts of the code are secure. The team ran 934 tests covering all aspects of the system to catch any issues.

Security experts found some problems during verification, which were quickly fixed. A special test network simulated complex setups to check gas costs and configurations. External partners also tested early versions to ensure the system can handle stress.

What this means: This is great news for AAVE holders. Strong security lowers the chance of hacks, which can attract big investors like institutions. The thorough testing also means the mainnet launch planned for early 2026 should go smoothly. (Source)

2. Horizon RWA Launch (August 2025)

Overview: Horizon created a new Ethereum market where institutions can borrow stablecoins by using tokenized real-world assets, such as government bonds, as collateral. This helps Aave diversify how it makes money.

The launch followed rules approved by the Aave community and met regulatory standards, with partners like Circle and Franklin Templeton involved. Initial deposits hit $550 million, with plans to grow beyond $1 billion by adding more assets over time.

What this means: This development is cautiously positive for AAVE. Real-world asset lending could increase fees for the protocol, but success depends on how well it navigates regulations. (Source)

3. Aptos V3 Deployment (August 2025)

Overview: Aave expanded to Aptos, a blockchain that uses a different programming language called Move, allowing faster transactions. After a successful security event with no bugs found, the supply limit per asset was raised to $1 million.

This launch also includes a native stablecoin called GHO, designed specifically for Aptos, with plans to encourage users through incentives.

What this means: This is a positive step for AAVE, helping it grow across multiple blockchains and tap into Aptos’ fast network. (Source)

Conclusion

Aave is focusing on making its platform more secure and scalable across different blockchains. The V4 update’s testnet launch by the end of 2025 could help stabilize the token’s price, while growth in real-world asset lending depends on regulatory approval. Looking ahead to 2026, Aave’s multi-chain approach could change how decentralized finance (DeFi) competes and grows.


Why did the price of AAVE go up?

AAVE increased by 2.16% in the last 24 hours, outperforming the overall crypto market gain of 1.3%. Here are the main reasons behind this movement:

  1. ETF Filing Momentum – Bitwise has submitted proposals for 11 altcoin ETFs, including AAVE, which could open the door for more institutional investors.
  2. Whale Activity – A large transfer of $400 million USDT into the Aave protocol signals a big boost in decentralized finance (DeFi) liquidity.
  3. Technical Rebound – Indicators like the Relative Strength Index (RSI) and Moving Average Convergence Divergence (MACD) suggest a possible short-term price recovery.

Deep Dive

1. ETF Speculation Resurgence (Mixed Impact)

Overview:
On December 30, Bitwise filed for 11 single-asset ETFs, including one for AAVE, aiming for approval by March 2026 (Bitwise). While ETF filings don’t guarantee immediate price jumps anymore, they confirm AAVE’s position as a recognized and regulated crypto asset.

What this means:
These filings come after the approval of spot Bitcoin and Ethereum ETFs, as well as products for Solana and XRP, which together manage $153 billion. Although the initial market reaction was modest, approval could bring more institutional investment into AAVE. However, since the SEC has updated its listing standards as of September 2025, the filings carry less surprise value than before.

What to watch:
Keep an eye on SEC comments regarding altcoin ETFs and whether Bitwise can secure a listing on the NYSE Arca exchange by early 2026.

2. Whale-Driven Liquidity Surge (Bullish)

Overview:
In February 2025, a large investor (often called a “whale”) moved $399 million USDT into the Aave protocol (CoinMarketCap). This highlights Aave’s growing importance in institutional DeFi strategies.

What this means:
Big stablecoin deposits usually signal upcoming borrowing activity and fee generation for the protocol. Aave currently holds $33 billion in total value locked (TVL), including $550 million backed by real-world assets (RWA). This makes it an attractive platform for investors seeking yield, especially given the 40.5% TVL growth on the BNB Chain in 2025, where Aave operates.

3. Technical Relief Rally (Neutral)

Overview:
AAVE’s recent 24-hour price increase followed a low of $143.67 on December 30, testing a key Fibonacci retracement level (78.6%). The RSI indicator moved out of oversold territory at 34.02, and the MACD histogram improved from -2.1 to -1.47 over the past week.

What this means:
Traders are closing short positions near important support levels, but the 30-day simple moving average (SMA) at $175.85 still acts as resistance. Trading volume is about 30% below December’s average, indicating cautious market participation.

Conclusion

AAVE’s recent price rise is driven by a mix of ETF-related optimism, large liquidity inflows from whales, and technical signs of recovery. While it hasn’t yet reversed a 48% drop over the past 90 days, it shows signs of resilience compared to other altcoins.

Key to watch: Can AAVE maintain support above $150 and challenge the $167.76 Fibonacci level? Watch for hourly closes above $152.50 as a sign of confirmation.

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