• Aave DAO has proposed to purchase $2 million worth of Curve (CRV) tokens in an effort to support the DeFi ecosystem and position itself strategically.
• However, sentiment surrounding AAVE has remained negative, with a decrease in daily active addresses trading the altcoin since late June and whale activity also declining by 94%.
• An IntoTheBlock metric revealed that many AAVE holders remain ‘out of money’ as their investments have not yet recovered from pre-hack levels.
Aave DAO Proposes to Purchase $2 Million Worth of Curve Tokens
The governing body of the Aave [AAVE] lending protocol has approved the acquisition of $2 million worth of Curve [CRV] tokens. This decision was necessitated due to the protocol’s exposure to Curve’s hack. The aim is to support the DeFi ecosystem and position Aave DAO strategically in the Curve wars, benefiting GHO secondary liquidity.
Pre-Hack Decline in Interest
An assessment of trading activity in the past 24 hours revealed that sentiment remained negative amid declining accumulation pressure. Data from IntoTheBlock showed that AAVE’s network activity has dwindled since the end of June; daily active addresses trading the altcoin have dropped by 94%, while new demand for AAVE fell by 14% during this period. In addition, whale activity decreased by 94% since 23 June.
Many Holders Remain ‚Out Of Money‘
Per IntoTheBlock’s In/Out of The Money metric, many AAVE holders remain ‚out of money‘, which means their current market value is lower than their average cost for an address. This indicates that investors are holding at a loss as their investments have not yet recovered from pre-hack levels.
Investor Sentiment Unimpressed
Despite this significant development that might influence Aave’s trajectory in coming months, holders appear unimpressed as they continue to hold at a loss. Investor sentiment thus remains negative despite attempts to increase its appeal and value on markets through strategic token acquisitions and purchases such as CRV tokens.
Though it may take some time before investor confidence is restored after such events, Aave’s move towards purchasing CRV tokens stands out as a positive step towards restoring long term trust and stability within its ecosystem following Curve’s hack incident earlier this month.