The price of AAVE has experienced a certain pullback, mainly not due to the market itself, but because some large holders have chosen to actively reduce their positions and exit. As for why they are selling, the root cause lies in the conflict between the DAO and Labs being brought to the forefront.
Aave Labs, without going through the community governance process, transferred approximately 10 million dollars of project profits and explained it as 'earned income'; however, from the perspective of the DAO community, this fund obviously belongs to collective assets, which quickly sparked controversies regarding trust and governance.
The current progress is that the TAO side is trying to reclaim AAVE's brand-related resources, including domain names, official accounts, and other key assets. A once stable and established DeFi project has suddenly fallen into a tug-of-war over governance and control. Such events not only make some funds feel uneasy and choose to liquidate but also further exacerbate market concerns over the decentralized governance model of DeFi. The experiment of DAO is never easy, and who truly holds the core assets remains the most sensitive issue.
The impact of this turmoil is not only reflected in the price fluctuations of AAVE but, more importantly, it has once again exposed the structural vulnerabilities of the DAO. The reality is that the brand and discourse power long controlled by Labs are crucial components of the project's value; however, since the project claims to be decentralized, yet key resources are not in the hands of the DAO, this itself is a structural contradiction.
It can be confirmed that this will not be the last occurrence of similar conflicts, and more DeFi projects may witness similar scenarios in the future. The focus going forward will still be on observing the direction of events—if emotional selling leads to a significant drop in AAVE, it may instead create a phase opportunity.
From the market perspective, after a series of slight rebounds in the past few days, the market has re-entered a phase of consolidation, which is not surprising. In the short term, my intuitive judgment is: when overall liquidity is tight, but prices are not quickly driven down, it often indicates that there is capital secretly supporting and maintaining market stability.
Therefore, the current strategy is relatively clear—small incremental positions can be taken, and a significant drop may still occur, but it might not happen immediately.
