On Thursday, July 25, Marc Zeller, founder of one of the world’s leading independent agencies, ghost ghost
+3.67%
The DAO published: Temperature checks on new Aave governance proposals will lead to “fee switching”
Among the various components, the “buy and distribute” program, which proposes to acquire or “buy” AAVE on the secondary market using the protocol’s fee revenue, has received significant attention. After this “interim confirmation” was announced, AAVE’s market cap It rose 10% in two hours and has since risen another 5%, giving it a market cap of $188 million.
It is noteworthy that the surge in AAVE’s market cap coincided with the surge in Bitcoin’s price and the overall market during this period. BTC rose by about 2% in the two hours after Aave’s “temporary maintenance” was announced.
However, AAVE has still managed to outperform the overall market, showing that “temporary confirmations” have played a significant role in making AAVE one of the best performing tokens on the market over the past two days.
Despite this bullish price performance, Aave’s basic protocol metrics (such as outstanding debt or total locked value (TVL)) were largely unaffected. For example, Aave had a TVL of $13.02 billion at the time of the “temporary maintenance” issuance, and over the next two days, it moved only slightly, by less than 1%, to $12.91 billion.
The lack of impact on the protocol’s metrics is to be expected, as the temperature check for governance proposals does not affect the actual mechanism of the protocol. Rather, the enthusiastic price movement of the AAVE token better reflects the market’s expectations and optimism about the potential implementation of the proposal.
This is an excerpt from The Block’s Data & Insights newsletter, where we dig into the numbers that make up the industry’s most thought-provoking trends.
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