AAVE Plunges 18% as Governance Battle Over Brand and Domains Sparks $35M Sell-Off

Aave’s native token AAVE has cratered about 18% over the past week, making it the weakest performer among the top 100 cryptocurrencies even as bitcoin, ether and other large-cap tokens trade flat to slightly higher. The divergence points to a problem specific to Aave rather than a broad market selloff: traders are dumping the token amid a bitter governance dispute that has injected fresh uncertainty into the protocol. The fight centers on who controls Aave’s brand, web domains and public-facing channels — an argument that moved from forums and social threads into formal governance discussions, CoinDesk reported last week. That debate has rattled investors because control of those assets affects how the DAO can coordinate off-chain and operate its front-end gateways going forward. On-chain activity shows large holders responding decisively. Analytics firm Onchain Lens tracked one big wallet unloading roughly 230,000 AAVE — about $35 million at current prices — in a short window on Monday, swapping the tokens into ether derivatives and bitcoin. That sale helped trigger a near 10% intraday drop and compounded selling pressure that had been rising since the governance proposal hit a Snapshot vote. At the same time, wallets linked by on-chain explorers to Aave founder Stani Kulechov show he has been buying into the weakness. Kulechov reportedly picked up roughly $12.6 million of AAVE last week at an average price near $176, leaving him with an unrealized loss of roughly $2.2 million as the token slid further. Founder buys are typically viewed as a signal of confidence, but in this case they haven’t been enough to offset broader outflows. The contrast with the wider market is stark: bitcoin has held near $90,000 while ether, XRP and other majors largely avoided similar drawdowns. That pattern suggests investors are selectively de-risking projects facing internal governance uncertainty rather than exiting crypto wholesale. Governance disputes carry unique, open-ended risks. There’s no set timeline for resolution, and outcomes can materially alter how value and control flow through a protocol. For Aave, the dispute over brand and front-end control goes straight to how the DAO exerts influence off-chain — a knotty problem that doesn’t lend itself to quick fixes. What to watch next: the Snapshot vote results, any coordinated moves by large holders, and whether the community can reach a clear governance path forward. Read more AI-generated news on: undefined/news