Aave Governance Conflict Triggers $500M Market Cap Slide
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Jan 14 2026- Governance Power Struggle: Aave's governance token lost approximately $500 million in market value in mid-December 2025 due to a public conflict between its DAO and core development team, severely shaking investor confidence.
- Revenue Stream Control Dispute: DAO members discovered that swap fees tied to a new CoW Swap integration were being routed to an address controlled by Aave Labs instead of the DAO treasury, leading to widespread debate over governance rights and brand asset control, impacting market expectations.
- Whale Accumulation: While retail interest waned, the top 100 AAVE addresses increased their share from 72% to 80%, indicating that large investors opted for long-term holding amid uncertainty, reflecting cautious optimism for Aave's future.
- Market Sentiment Recovery: Following Aave Labs' announcement to explore sharing revenue generated outside the core protocol with token holders, market sentiment turned positive by January 13, 2026, with AAVE's price rising nearly 5% in 24 hours, indicating a gradual restoration of investor confidence.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
