Aave's (AAVE) Token Outperforms Top 100 Crypto Assets in Four Weeks, Up 48%

DeFi protocol Aave's native token AAVE has caught the industry off guard, outperforming every top 100 crypto asset in the past four weeks.

DeFi protocol Aave’s native token AAVE has outperformed every top 100 crypto asset in the past four weeks, with a price increase of over 48%.

AAVE’s impressive performance is highlighted by the fact that the runner-up, Helium’s HNT token, has only seen a price increase of 21%.

AAVE’s price at the time of writing fluctuates at a little over $139. This performance is particularly noteworthy as it outpaced the gains of the top two cryptocurrencies, bitcoin (BTC) and Ether (ETH), which both saw price increases of around 20% over the same period.

Several proposals have been introduced to alter the role of AAVE token in the Aave protocol, which may have contributed to the increased attention on the token.

The token’s gains follow a few proposals to change its role in the Aave protocol. Its rally began last month with a proposed fee switch suggested by Aave-Chan Initiative founder Marc Zeller.

The fee switch will see excess revenues distributed to ecosystem participants, such as AAVE stakers and GHO minters (GHO being the protocol’s stablecoin). Aave’s excess revenues will then be used to buy back the token from the market, increasing buying pressure when the fee switch is activated.

Moreover, the proposal has garnered market interest in the protocol and its token due to the anticipation of earning rewards for holding and staking AAVE.

Another proposal, known as the Umbrella Proposal, aims to shift Aave’s “seize and sell” mechanism, which currently utilizes AAVE to cover bad debt but adds increased selling pressure on the token.

The proposal suggests replacing the “seize and sell” mechanism with a “seize and burn” mechanism, which will use Aave’s GHO and aToken together with AAVE instead of just the native token.

This change will reduce selling pressure on AAVE while still covering bad debt.

Web3 native agency DeeLabs commented on Aave’s innovative approach, highlighting the fact that “so few take advantage of the properties and features that being onchain provides.”

“That is why it’s great seeing a behemoth like Aave taking advantage of this and staying at the forefront of DeFi time and time again,” the agency added.