Complete Gate Post tasks to upgrade your rank

Credit Ranking

[//]:content-type-MARKDOWN-DONOT-DELETE
![](https://gimg2.gateimg.com/image/article/17254201601692587449analysis.jpeg)
## [TL; DR]
<a href="/price/aave-aave" target="_blank" class="blog_inner_link">Aave</a> recorded a more than 45% price rise within one month.

The fee switch feature will incentivize investors to stake their Aave.

Increased whale buying activity in August contributed to the Aave bullish moment. 

## Introduction 
A unique thing about the <a href="/price" target="_blank" class="blog_inner_link">cryptocurrency market</a> is that the various assets perform differently despite operating in the same macroeconomic conditions. One reason why their performances differ are their fundamentals and use cases. In the recent bullish period Aave was one of the main gainers, outperforming other major cryptocurrencies. In this analysis, we look at the reasons for its 45% price surge. 

## Analyzing Factors behind Aave 45% Price Surge
Aave, the native cryptocurrency for the Aave, a [decentralized crypto lending platform](https://www.gate.io/learn/articles/what-is-aave/240 "decentralized crypto lending platform") gained by over 45% within a four week period that stretched to the end of August. The token outperformed all the top 100 cryptocurrencies, based on market capitalization. <a href="/price/helium-hnt" target="_blank" class="blog_inner_link">Helium</a>'s HNT that rallied  by 26% was the second best performer within the period, faring better than the leading pack of <a href="/price/bitcoin-btc" target="_blank" class="blog_inner_link">bitcoin</a>, ETH, <a href="/price/bnb-bnb" target="_blank" class="blog_inner_link">BNB</a> and <a href="/price/solana-sol" target="_blank" class="blog_inner_link">Solana</a>, among others. However, despite its outstanding price rally Aave’s total value locked (TVL) is still far less than the 2021 peak of over $32 billion. 

There are several triggers for Aave’s 45% rally that include changes in its fundamentals. One of the key proposals which resulted in the rally was Marc Zeller’s, founder of the Aave-Chan, initiative to introduce a fee switch mechanism. This system involves redirecting the extra revenue from the platform to important key ecosystem players such as the stakers. Another aspect of this system is buying back the Aave from the secondary market when there is revenue to do so. That additional incentive for staking and holding the token was well-received by the investors leading to the price spike. 

The umbrella proposal was the other factor that influenced the Aave token price to rise significantly leading to its financial growth. This is a move to change the existing “seize and sell” process of liquidating loans (bad debts). As expected, the “seize and sell” process increases the selling pressure which is not good for the <a href="/price/aave-aave" target="_blank" class="blog_inner_link">Aave crypto</a> price action. The team proposes to replace this “seize and sell” liquidation process by the “seize and burn” strategy. With that, the platform will use AAVE’s GHO stablecoin and aTokens which represent the assets of the depositors.

The other factor that led to the recent <a href="/price/aave-aave" target="_blank" class="blog_inner_link">Aave price</a> increase was a rise in whale activity during August. LookOnChain has given an example of a whale that acquired 77,270 Aave tokens. 
![](https://gimg2.gateimg.com/image/article/17254202291.jpg)
A Crypto Whale Acquired Aave Tokens- x.com/Lookonchain 

Based on crypto investment trends whales influence the values of cryptocurrencies by buying or selling them in large quantities. In this case, some whales have been buying Aave in large quantities leading to its recent bullish market performance. For example, between 20 and 21 August alone two whales acquired Aave worth $12.02 million.

The fact is that the tokenomics discussion relating to fee switch and the umbrella proposals made many investors to refocus their attention on <a href="/price/aave-aave" target="_blank" class="blog_inner_link">Aave crypto</a>. In the end, many investors started viewing the crypto assets as a blue chip DeFi asset that reflects the growth of the whole <a href="/price" target="_blank" class="blog_inner_link">crypto market</a>. That change in market sentiment gave the asset the additional push it required to rally. Some investors even proposed that the Aave crypto is undervalued and would profit in the future if they buy it now. 
![](https://gimg2.gateimg.com/image/article/17254202482.jpg)
Aave is Undervalued- x.com/Aurron

Aurron, with X username @AxieAur, is one of the investors who thinks that Aave is undervalued.  

## Aave Ecosystem: Its Role in the DeFi Sector and its Functionalities
Another thing that can assist us to appreciate the recent <a href="/price/aave-aave" target="_blank" class="blog_inner_link">Aave price</a> surge is to understand its role in the DeFi sector and the entire crypto market. Basically, Aave is a decentralized lending protocol that [exists on the Ethereum blockchain](https://www.gate.io/learn/articles/what-is-ethereum/2882 "exists on the Ethereum blockchain"). As such, the platform allows people to lend their cryptocurrencies and earn interest. On the other hand, interested individuals can borrow some crypto assets. 

It is important to note that the borrowers use their cryptocurrencies as collateral. Usually, they use Aave as collateral and will be able to borrow crypto assets such as ETH, wBTC and USDC. The fact that Aave handles different types of cryptocurrencies makes it a very important institution in the DeFi sector.

## The Future of Aave: Its Prospects in the DeFi Sector
The popularity of Aave is likely to increase in the future with the rise of the DeFi sector. Each year <a href="/price/view/new-cryptocurrencies" target="_blank" class="blog_inner_link">new crypto</a> users come onto the market. Some of these newcomers to the sector may need to invest in Aave through lending. On the other hand, other people can borrow cryptocurrencies of their choice. That may help to drive the Aave value up. Some analysts believe that the Aave price [may reach $530 by 2030](https://www.gate.io/price-prediction/aave-aave "may reach $530 by 2030"). Even in the short term its value may rise as well. Considering that Aave is currently trading at $26.02 its price may surpass $50 by the end of 2025.

Based on the current crypto analysis Aave may remain the leader in the decentralized lending sector due to its ability to innovate and bring new products on the market. For example, recently Aave approved the introduction of its stablecoin, GHO, pegged against the US dollar.

## Conclusion  
The proposed changes to the Aave tokenomics have resulted in its recent price surge. For example, there is a proposal to introduce a fee switch that will enable its additional revenue to be channelled towards key players such as stakers. The rise in Aave whale buying activity during August also contributed to its bullish moment. Looking into the future, Aave is likely to introduce new developments that will lead to the growth of the DeFi sector. 



<div class="blog-details-info">
<div>Author: Mashell C., Gate.io Researcher
<div class="info-tips">\*This article represents only the views of the researcher and does not constitute any investment suggestions.
<div>\*Gate.io reserves all rights to this article. Reposting of the article will be permitted provided Gate.io is referenced. In all cases, legal action will be taken due to copyright infringement.
</div>

English

日本語

The proposed Umbrella mechanism and fee switch feature resulted in Aave’s 45% price surge.

福利中心

铭文导航-铭文Launchpad

铭文-铭文导航

铭文-web3startup

新币挖矿

小红花-Exchange-Startup

交易-创新交易

交易-盘前交易

打新

小红花-Learn & Explore-博客

小红花-Learn & Explore-快讯

币圈-币圈-未来事件

小红花-Learn & Explore-聊天室

小红花-Learn & Explore-直播

小红花-Learn & Explore-动态

年度账单

币圈

Gate OTC

芝麻金融-更多-财富管理

机构-APIs

机构-大宗交易服务

机构-经纪商项目

全球做市商计划

机构-托管和资产管理

机构-借贷服务

机构-做市商项目

小红花-Promotions-机构和VIP服务

量化基金

机构-基础架构

机构-交易

机构-金融

结构化产品

机构-主页

衍生品-统一账户

芝麻金融-更多-抵押借币

机构

策略跟单

现货跟单

合约跟单

跟单

量化策略-探索

量化策略-进阶

量化策略-基础

机器人广场

创建机器人

探索机器人

杠杆网格

无限网格

期现套利

组合指标策略

智能调仓

现货马丁格尔

合约网格

现货网格

交易机器人

芝麻金融-更多-ETH2.0挖矿

芝麻金融-更多-法币借贷

USDE挖矿

链上赚币

芝麻金融-理财-双币宝

芝麻金融-理财-定期理财(屯币)

芝麻金融-理财-结构性理财

芝麻金融-理财-理财宝

芝麻金融-理财-余币宝

GT挖矿

芝麻金融-更多

芝麻金融-理财

赚币

衍生品-实盘跟单

衍生品-期权

衍生品-交割合约

衍生品-永续合约

衍生品-合约中心

新手引导(合约)

合约活动

衍生品

交易-量化策略

交易-杠杆ETF

交易-杠杆交易

交易-闪兑

交易-现货交易

交易

行情

买币-gateCard

买币-法币交易

买币-银行账号

买币-快捷交易

买币-信用卡

买币-paywith

买币

小红花-推广

新手指南

活动中心

小红花-Learn & Explore-学院

任务广场

小红花-Exchange-最新公告

小红花-Exchange-帮助中心

小红花-Exchange-交易所

gate商店

小红花-Promotions-推荐官计划

小红花-Promotions-邀请计划

小红花-promotions-代理商

cextg小程序

小红花

web3

Aave Token Outperforms: Analyzing the 45% Price Surge and Future Prospects