AAVE Price Prediction as Founder Hints at a Major Tokenomics Revamp

Key Insights

• AAVE price has continued rising in the past few days.
• Stani Kulechov, the founder, said that the network will implement a major revamp.
• The statement came amid new acquisition rumors by Kraken.

AAVE price extended its rally over the past few weeks, outperforming Bitcoin, Ethereum, and XRP. The token rebounded from $57.78 earlier this month to around $96.30, while trading activity also increased. The recovery followed comments from founder Stani Kulechov about a potential tokenomics overhaul and his rejection of reports that Kraken was negotiating to acquire a stake in Aave Labs.

AAVE Price Climbs on Tokenomics Expectations

Aave token has made a big rebound in the past few days as traders reacted to several major news. One of them is a report that Kraken was in talks to acquire a 15% stake in the parent company at a $385 million valuation.

Kulechov appeared to reject these reports in a long post on X. In it, he argued that he would not sell the company at a 70% discount. He argues that Aave’s fundamentals are still strong.

For one, he noted that Aave channels all its revenue to the AAVE token, a process that started with the Aave Will Win proposal. In this case, no protocol or product revenue goes to Aave Labs, which is a service provider to the decentralized autonomous organization (DAO) responsible for building and growing Aave.

Most notably, he hinted that the developers were working on improving its tokenomics, in which he called Aavenomics 3.0. This revamp may lead to more buybacks and token burns, which are meant to boost the token value.

Kulechov has also shared other ideas on how to grow the network. One way is to introduce tokenized stocks to the platform, a move that will take advantage of a market valued at over $4.6 trillion today. Already, its tokenized gold is seeing strong demand this year.

Aave is Recovering After Coming at Risk of Collapse

The ongoing events are coming at a time when Aave is recovering following the recent KelpDAO hack. KelpDAO suffered a $292 million loss a few months ago, with the hackers stealing the rsETH tokens.

Aave was not directly attacked by the hack. However, it was exposed because it had accepted rsETH as collateral and was left with bad debt. As a result, several large players in the crypto industry raised millions of dollars under the DeFi United brand.

Still, while the crisis was resolved, Aave is yet to go back to where it was a few months ago. For example, the total value locked (TVL) in the network dropped to $12.4 billion from a peak of $45 billion a few months ago.

The falling TVL has also contributed to fewer fees that the network makes. Its fees currently stand at $350 million this year. This means that, unless the situation improves, the fees will not be enough to get to last year’s level of $907 million.

The ongoing AAVE price rally is happening in a high-volume environment. Total volume rose by 1.20% in the last 24 hours to $500 million, giving it a volume-to-market cap ratio of 33.6%.

Aave Price Technical Analysis

The daily chart shows that the AAVE price has rebounded in the past few days. This rebound happened after the token formed a large falling wedge pattern, a common bullish reversal sign. This pattern consists of two falling, converging trendlines.

The coin has moved above the upper side of the falling wedge. It has now moved above the 50-day Exponential Moving Average (EMA). Also, the Relative Strength Index (RSI) has continued rising and has moved above the overbought level.

Therefore, the token will likely continue rising in the near term, with the next key target to watch being at $120, its highest point on April 17. However, a drop below the support level of $75 will invalidate the bullish outlook.

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