Aave (AAVE) Token Emerges as the Market's Top Gainer, Soaring 20% After the Release of a New Governance Proposal

Decentralized finance (DeFi) token AAVE has emerged as the market's top gainer in the past 24 hours, soaring 20%. The surge follows the release of a new governance proposal to restructure the protocol's tokenomics.

Decentralized finance (DeFi) token Aave (AAVE) has emerged as the market’s top gainer in the past 24 hours, surging 20%. The positive community reaction to a new governance proposal has spurred interest in the protocol’s token, AAVE.

This interest has led to increased demand for the altcoin throughout the day, which may continue to push the token higher in the short term.

Aave’s Aavenomics Proposal Fuels 20% Surge—But Will It Last?

On March 4, Aave Chan Initiative (ACI) founder Marc Zeller, also known as Marc Zeller_GHO on Chain, introduced a proposal that details the first phase of implementing the Aavenomics update.

The proposal, which follows a TEMP CHECK approved in August 2024, aims to revise AAVE tokenomics, redistribute protocol excess revenue, deprecate the legacy LEND token, and launch Anti-GHO to improve incentives for GHO stablecoin holders.

This new proposal has received positive feedback from Aave DAO members, prompting the market to focus on the protocol’s native AAVE token. Consequently, AAVE’s price soared by 20% over the past 24 hours, making it the market’s top gainer.

Notably, AAVE’s double-digit rally has led long-term holders to move their tokens, as shown by the spike in its age-consumed metric. According to blockchain analytics firm Santiment, the metric, which measures the movement of long-held coins, totaled 11.66 million on Tuesday.

This rise is significant because long-term holders are not known for frequently shifting their coins. When they do, especially during periods of price increase, it indicates a change in market trends.

Moreover, a rapid surge in the age-consumed metric during a rally could indicate that these long-term holders are offloading their tokens, potentially putting more selling pressure on the asset.

Additionally, there was a 114% increase in AAVE’s exchange inflow on Tuesday, further confirming this selling activity. This metric, which tracks the amount of an asset sent to exchanges, is crucial as a spike signifies that a large portion of the asset is being deposited into exchanges, often linked to heightened selling activity.

This may exert downward pressure on AAVE, causing it to lose some of its recent gains.