Aave Plunges 18% as Governance Feud Spooks Investors, Defying Stable Market

The governance token for DeFi lending protocol (AAVE) has tumbled nearly over the past week, making it the worst performer among the top 100 cryptocurrencies. The sell-off comes even as and other major tokens trade flat, suggesting the pressure is specific to internal turmoil over who controls the protocol’s brand and public channels.

The dispute centers on control over brand, domains, and communication channels. According to a CoinDesk report, selling pressure intensified after the governance proposal moved to a Snapshot vote, introducing significant uncertainty around the protocol's future decision-making.

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On-chain data tracked by Onchain Lens revealed decisive moves from large holders. One whale sold roughly —worth nearly —in a short window on Monday, triggering a sharp intraday drop. In contrast, wallets linked to founder show he purchased approximately worth of AAVE over the past week at an average price of . However, this vote of confidence wasn't enough to stem the bleeding, leaving him with an estimated unrealized loss of .

The divergence between AAVE and the rest of the market is striking. has held steady near , while other majors have avoided similar drawdowns. This contrast suggests traders aren't de-risking from crypto broadly but are selectively shedding exposure to protocols facing acute internal uncertainty.