Aave news

A large Aave loan, backed by roughly 2.3% of the platform’s total supply, is being liquidated in four tranches as the token slid below $105. The liquidations, triggered by a 15% daily drop, have seized about $2 million worth of AAVE collateral to cover nearly $2 million of USDC debt. The position, originally collateralized with 355,093 AAVE tokens (~$28.4 million) and a 132% collateral ratio, had a health factor near 1. The borrower has repeatedly drawn and repaid USDC, and speculation that the founder Stani Kulechov was involved was rebuffed. Bitcoin and ETH also fell >13% that day.

Ethereum lending on-chain surpassed $28 billion of active loans in January 2026, with Aave controlling roughly 70 % of the market. Active loans have risen tenfold from 2023 lows, giving Ethereum a roughly ten‑to‑one advantage over chains like Solana and Base. During a weekend crash, Bitcoin fell from about $84 k to below $76 k, triggering $2.2 billion of liquidations; Aave liquidated $140 million in collateral across networks, preventing broader contagion. Aave’s automated process held up despite gas fees spiking over 400 gwei and temporary “zombie” positions; other protocols such as Compound and Spark absorbed smaller volumes. The event underscores Ethereum’s growing leverage and the protocol’s resilience, but also highlights systemic risk in a rapidly expanding DeFi ecosystem.

Aave Labs is shutting down the Avara brand and winding down non‑lending projects such as the Family wallet, after a rebrand that once grouped projects like Lens and Avara. All products will now fall under Aave Labs to focus on the lending protocol. The move follows tensions between Aave Labs and the Aave DAO over control of the protocol and IP. While the DAO governs smart‑contract parameters, Labs owns the frontend, branding, and other off‑chain assets. Aave Labs now plans to share non‑protocol revenue with AAVE token holders and redirect resources to expand DeFi adoption worldwide.

Two major Ethereum whales sold a combined $371 million of ETH over 48 hours to repay debt on Aave. BitcoinOG sold 121,185 ETH ($292 m) and used $92.5 m to pay, while Trend Research sold 33,589 ETH ($79 m) and repaid $77.5 m. The sales coincided with Aave’s automated liquidations of $140 m, but were voluntary, aimed at reducing leverage. BitcoinOG keeps 783,514 ETH ($1.78 b) and 30,661 BTC; Trend Research still holds 618,045 ETH ($1.4 b). The moves show institutional risk‑reduction amid volatility, while Aave processed liquidations, hit record ETH deposits, and remains the top DeFi protocol.

Aave has captured 51.5 % of the DeFi lending market, the first protocol to exceed 50 % since 2020. Its $33.37 B TVL dominates a $64.83 B pool, concentrating liquidity and raising concerns about fragility versus efficiency. With $24 B in borrows, a 71 % borrowed‑to‑TVL ratio means Aave acts as a leveraged margin engine that can trigger rapid deleveraging. A recent $193 M liquidation day proved the system works when conditions are benign, but a 25‑35 % drawdown and stable‑coin or liquidity shocks could push volumes past $600 M, exposing systemic risk; a $460.5 M backstop covers only 2 % of debt.

Maple extends its yield‑bearing US dollar token, syrupUSDC, to Coinbase’s Base layer‑2, giving institutional credit to a fast‑growing ecosystem. The move offers a direct path to Base’s broader user base and aims to unlock institutional‑grade yields beyond Ethereum mainnet. An Aave V3 Base collateral proposal is live, and Chainlink will interoperate between Base and Ethereum. Maple stresses over‑collateralization, real‑time collateral monitoring and defined liquidation thresholds, positioning syrupUSDC as a scalable, secure yield asset for Base’s expanding DeFi stack.

Aave has transferred stewardship of the Lens social‑infrastructure protocol to Mask Network, narrowing its focus to DeFi while Mask takes over consumer‑facing application development. Aave will remain a technical adviser; Lens will stay open‑source, permissionless and unchanged in ownership, IP or treasury. Founder Stani Kulechov explained the shift means Aave’s role will be advisory and Mask will lead product roadmap and UX for Lens apps. Ethereum co‑founder Vitalik Buterin praised Lens’s evolution and stressed that decentralized social layers are essential for better mass communication.

Aave is set to hold a governance vote on Jan 2, 2025, to propose sharing off-protocol revenue with AAVE holders. The plan, which covers revenue sources, safeguards, and brand-asset control, lifted the token's price by more than 10%. Following disputes over Aave Labs' control, the proposal seeks to align interests, reduce tension, and guide the protocol toward real-world assets and institutional use. Approval could reshape governance; rejection may prolong debate.

Aave founder Stani Kulechov has outlined a broader vision after a failed vote that rejected transferring the protocol’s brand and IP to its DAO. He urges the community to move beyond core DeFi lending, exploring real‑world assets, institutional and consumer products as the platform sits at a crossroads for future growth. The dispute centered on who controls revenue from swap fees, with some swaps routed through CoW Swap. The vote rejected shifting those fees to the DAO, and Kulechov denied that his recent $15 million AAVE purchase influenced the outcome. He emphasizes the potential $500 trillion RWA market and highlights Aave’s $45 billion TVL as the basis for a long‑term strategy.

Aave Labs’ founder Stani Kulechov announced a plan to share non‑protocol revenue with AAVE holders, aiming to soothe growing tensions between the R&D firm and the DAO. The proposal follows disputes over front‑end fee diversion and calls for greater alignment on a long‑term vision that expands beyond crypto‑native use cases. The move also signals a willingness to resolve branding and intellectual‑property concerns, with Kulechov pledging to submit a formal proposal detailing revenue structures and ownership arrangements.