AAVE price hit an intraday high of $119.35 earlier today before pulling back to $116.60, though it remains in the green with a 2.8% gain over 24 hours.
Despite this short-term rise, market sentiment is cautious as the Aave community prepares to vote for a contentious revenue redirection proposal.
The vote concerns a proposed $51 million funding package for Aave Labs, the team behind the protocol’s core development.
The Aave governance dispute
The Aave decentralised autonomous organisation (DAO) faces increasing scrutiny over this proposal.
Critics argue that Aave Labs has already received substantial funding, estimated at over $86 million from various sources, including past grants, ICO proceeds, and swap fees.
The concern is not just the size of the new funding, but the lack of clear accountability metrics for how previous resources were used.
Marc Zeller, founder of the Aave Chan Initiative (ACI), recently published an audit of Aave Labs, highlighting gaps in transparency and financial reporting.
The report questions product outcomes, noting some initiatives did not achieve profitability or were underutilised.
Zeller also raised concerns about governance concentration, pointing to clusters of voting addresses that have historically influenced major decisions.
Earlier, Aave Labs had released its own contributions report outlining its role in building the Aave protocol since 2017.
Aave Labs supporters, however, emphasise the team’s contributions to protocol upgrades, including Aave V1 through V3, and critical features like the Safety Module and flash loans.
They argue that past work justifies continued funding and that the DAO’s long-term stability depends on keeping experienced developers engaged.
The debate reflects a broader issue: how much power and funding should remain centralised within core contributors versus being strictly regulated by the DAO.
Market impact
The governance dispute has had a direct effect on AAVE price momentum.
Even though the token started the day strong, bullish gains were limited as traders weighed the outcome of the upcoming vote.
While the Total Value Locked (TVL) in the protocol remains high at over $26 billion, supporting fundamentals, uncertainty about funding and oversight has tempered investor enthusiasm.
Analysts note that if the vote passes smoothly with clear reporting conditions, confidence in AAVE could improve.
However, any delay, rejection, or further dispute could trigger increased volatility.
AAVE price forecast
For short-term traders, the immediate support level can be found near the $112–$113 range, which corresponds to the lower bound of the 24-hour range.
On the upper side, the immediate resistance is around $119–$120, the recent intraday high, with a secondary target near $127, which represents the upper bound of last week’s trading range.
On a longer-term horizon, bullish scenarios suggest AAVE could recover toward $500–$800 by 2030 if DeFi adoption continues and the protocol maintains strong performance.
Conversely, regulatory pressures or intensified competition could keep the token in a more conservative range of $250–$400.
Beyond the charts, traders should monitor both governance developments and protocol activity, as these factors will likely dictate short- and mid-term price movements.
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