Aave loses 18% this week as ongoing dispute pushes the token lower than its major crypto peers.

Aave Falls 18% Amid Governance Dispute, Outpacing Major Cryptos

Aave’s governance battle is hitting its token hard. AAVE has dropped roughly 18% over the past week, making it the worst-performing cryptocurrency among the top 100, even as Bitcoin, Ether, and other major tokens trade flat or slightly higher.

The decline appears specific to Aave. The selloff follows a dispute over control of the protocol’s brand, domains, and public channels, which has played out across forums and social media. Traders are reacting to uncertainty over decision-making and the protocol’s future direction.

Onchain data from Onchain Lens shows major holders moving decisively. One investor sold around 230,000 AAVE—worth nearly $35 million—on Monday, exchanging the tokens for Ether derivatives and Bitcoin and triggering a nearly 10% intraday drop.

Meanwhile, Aave founder Stani Kulechov has been buying the dip, purchasing about $12.6 million of AAVE at an average price of $176. Despite this, the broader selloff continues, leaving him with an unrealized loss of roughly $2.2 million.

The divergence from the wider market is clear: Bitcoin remains near $90,000, and Ether, XRP, and other major tokens have avoided similar losses. This indicates selective de-risking by traders targeting protocols facing internal uncertainty rather than a market-wide retreat.

Unlike macro-driven selloffs, governance disputes carry open-ended risk. In Aave’s case, control over the brand and front-end interfaces directly affects how the DAO exerts influence off-chain, making the outcome uncertain and potentially transformative for the protocol.