Aave tumbles after rumors about World Liberty token allocation

The Aave (AAVE) token fell more than 8% on Saturday following social-media rumors that World Liberty Financial (WLFI) planned a token allocation benefiting the Aave decentralized autonomous organization (DAO). Market reaction pushed AAVE from roughly $385 to a low near $339 before it recovered to about $352.

Reports centered on a WLFI community governance proposal from October 2024 that described a potential arrangement in which the Aave DAO would receive 7% of WLFI’s circulating governance-token supply and 20% of protocol revenues generated by WLFI’s deployment on Aave v3.

Blockchain reporter Colin Wu shared an update indicating WLFI had told him claims that “Aave will receive 7% of the total WLFI token supply” were false, calling the specific claim fake news. The exchange of claims and denials on social platforms intensified debate and contributed to the price move.

Aave founder Stani Kulechov commented on the proposal, calling it “the art of the deal,” and posted separately suggesting the proposal’s terms remained alive, remarks that further fueled community discussion about the proposal’s status and implications.

Cointelegraph contacted spokespeople for both World Liberty Financial and Aave but had not received a response by the time of publication. The incident highlights how quickly rumors or proposal language can move markets in the decentralized-finance (DeFi) space.

Observers note the episode comes amid renewed interest in DeFi and growing institutional involvement in the sector. Total value locked in DeFi protocols is rising again and approaching earlier highs, a trend that has contributed to increased scrutiny and debate about regulation and the role of traditional financial actors in permissionless protocols.