AAVE spikes 27%, whale accumulating ahead of GHO stablecoin mainnet launch

AAVE, the native governance token of Aave, a decentralized, multichain, and non-custodial lending and borrowing protocol, is up 27% as of June 25. The explosion of AAVE prices follow a lull and under-performance in the second half of the week when bitcoin and ethereum prices edged higher on improving trader sentiment and increasing institutional interest in some assets.

AAVE pumping, whale accumulating

When writing on June 25, AAVE is changing hands at $71, up 27% in the last 24 hours. Moreover, bulls have reversed all losses registered in June when prices plunged by roughly 30%, finding bottoms at around $50.

According to the on-chain analytics platform, Lookonchain, the AAVE surge can be pinned to the actions of a whale accumulating the token. Trackers show that an unknown whale, “0x5a80,” has accumulated 182,152 AAVE worth $13.2 million from multiple exchanges in the early hours on June 25.

Still, AAVE’s liquidity is deep, reading from trackers. Most AAVE trading is on Binance, the world’s largest cryptocurrency exchange by trading volumes. AAVE trading at this exchange commands a 12% market share where AAVE is paired with USDT. Notably, its liquidity score is 618, the highest among all exchanges.

Following his rapid accumulation, the whale now holds 413,373 AAVE worth over $29.7 million at spot rates. A closer look at Etherscan also shows that the address holds more than 3.15 million SUI, the native currency of the Sui Network, as well as the meme token, Vitalik Pepe (VIPEPE).

Accumulating or speculating on AAVE?

It is not immediately clear whether the unknown individual is accumulating to speculate or aims to increase their voting power on protocols like Aave. In Aave, AAVE is used for various purposes, including staking, paying fees, and voting on proposals. Being a decentralized platform, AAVE holders can vote on changes to continuously improve the platform.

In early June, for example, the Aave community floated a proposal to deploy GHO, the Aave protocol stablecoin, on the mainnet. Widely supported by the Aave community, if approved through a majority voting from AAVE holders, the GHO stablecoin will launch with a borrowing cap of $100 million. 

At the same time, Aave V3 will be free to mint the stablecoin using their ethereum (ETH) deposits as collateral. The Aave DAO will collect all interest payments from borrowed GHO, increasing their revenue base.