Aave, one of the largest decentralized finance (DeFi) protocols, has found itself at the center of controversy following allegations that it would receive a significant token allocation from World Liberty Financial (WLFI), a DeFi platform associated with Donald Trump’s family. According to a proposal made public in October 2024, Aave’s decentralized autonomous organization (DAO) would receive 20% of the protocol fees generated by the WLFI Aave v3 instance and approximately 7% of the total WLFI token supply. However, the WLFI team has since denied the claim, stating that the assertion is false and misleading [2].
The controversy gained traction after an X user, purportedly a Delphi Digital analyst, suggested that Aave’s potential exposure to WLFI may be undervalued by the market. The analyst estimated that if the WLFI token—set to begin trading on September 1 with an implied valuation of $27.3 billion—were to deliver on its promise, Aave’s allocation could be worth approximately $1.9 billion [2]. This would amount to more than a third of Aave’s current fully diluted valuation of $5 billion, potentially influencing investor sentiment and contributing to Aave’s recent price rally [2].
AAVE, the governance token of the Aave protocol, experienced a 19% surge in 24 hours, reaching $355.29 [2]. This surge coincided with Aave’s expansion onto the Aptos blockchain, marking its first deployment on a non-EVM chain. The move was accompanied by extensive audits, a bug bounty program, and risk assessments by third-party firms, signaling Aave’s commitment to security and scalability [2]. Stani Kulechov, founder and CEO of Aave, hailed the launch as a milestone in the protocol’s evolution [2].
The timing of the WLFI rumors also overlapped with a significant shift in the U.S. Federal Reserve’s stance. Federal Reserve Chair Jerome Powell’s dovish remarks at the Jackson Hole Economic Policy Symposium heightened expectations of rate cuts as early as September, with CME FedWatch data showing an 83% probability of a quarter-point cut [2]. The broader market responded positively, with AAVE among the top-performing assets [2].
Despite the WLFI team’s denial, the rumor created immediate volatility in Aave’s token price. On Saturday, AAVE dropped by over 8% following the news, falling from $385 to a low of $339 before partially recovering to $352 [4]. Aave’s founder, Stani Kulechov, referred to the WLFI proposal as “the art of the deal” and appeared to affirm the terms in separate posts [4]. However, the uncertainty surrounding the allocation deal highlights the risks associated with token-based partnerships in the DeFi space, particularly when unverified claims can rapidly influence market sentiment [4].
The broader DeFi sector has also seen renewed interest, with total value locked (TVL) reaching over $167 billion, according to DeFiLlama [4]. The rise of institutional involvement, including banks and asset managers, has further reshaped the DeFi landscape, raising questions about regulatory oversight and the long-term independence of decentralized protocols [4]. As Aave continues to expand its network and integrate with new blockchains, the controversy with WLFI underscores the importance of transparency and due diligence in token-based collaborations within the crypto ecosystem [4].
Source:
[1] Aave (https://aave.com/)
[2] 3 Potential Reasons for AAVE’s Stunning Performance (https://www.coindesk.com/markets/2025/08/23/aave-leads-top-40-cryptocurrencies-with-19-surge-in-one-day-here-s-what-s-driving-it)
[3] Trump Family’s World Liberty Financial (WLFI) Token Finally Launches on Ethereum (https://finance.yahoo.com/news/trump-family-world-liberty-financial-103246995.html)
[4] Aave tumbles following rumors regarding World Liberty (https://cointelegraph.com/news/aave-tumbles-rumors-world-liberty-token)
You can contact us for more informations or ads here [email protected]