AAVE is one of the largest lending protocols in the DeFi space. When a project like this gets stuck, it raises concerns for the entire space. If you look at the AAVE movement right now, that concern is all but growing.
Does AAVE live up to expectations?
When it comes to a DeFi project, consistent usage is a bigger concern than adoption. The DeFi hype has decreased significantly in the last month and has therefore reacted just as negatively to some large DeFi projects.
Now, AAVE is still doing fine when it comes to rollout in the sense that Balancer Labs, a DApp leading in programmable liquidity, added AAVE boost pools to their network yesterday to give their users higher levels To offer returns, higher capital efficiency and more liquidity.
But the one-time King of DeFi has become one of those projects whose indolence has led its investors to question their investment.
Firstly, due to the broader market slump, the owners decided to only label their AAVE with HODL. Usually this mood is short-term, as falling prices recover after a while.
In the case of AAVE, however, the price action has been going south for 4 months. It has come to the point that AAVE is now closer to pre-March rally levels.
AAVE price promotion | Source: TradingView – AMBCrypto
But this stagnant movement has a broader impact on the network. The average address balance has fallen and is currently at its all-time lows, suggesting losses not due to investor exits but rather to the lack of rises.
AAVE average balance | Source: Intotheblock – AMBCrypto
This is also confirmed by the fact that the network has seen mostly losses in recent months.
Second, the steady decline in speed since July due to the lack of token movements is also supporting investor sentiment.
AAVE speed | Source: Santiment – AMBCrypto
Even the whale movement has diminished week in and week out, despite having a 65 percent dominance over AAVE’s 13.4 million offering.
Distribution of AAVE investors | Source: Intotheblock – AMBCrypto
All in all, this has had an impact on network growth, and that could actually turn off new investors if the network doesn’t start an uptrend soon.
AAVE network growth | Source: Santiment – AMBCrypto
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