Arbitrum Council Member Warns of Aave's Liquid Staking Risks

Written by Ohris M. Greyoon, Blockchain & Crypto Expert

Source: Coinmarketcap

Updated: May 06 2026

AAVE+1.295%

ARB+2.927%

RPL+1.183%

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Liquid Staking Risk Warning: Griff Green, a member of the Arbitrum Security Council, has criticized Aave for being too permissive with liquid staking tokens as collateral, which could expose lenders to liquidity and liquidation risks, jeopardizing borrower safety.
Security Incident Context: Green's involvement in freezing $70 million linked to North Korean hackers highlights the real security threats DeFi protocols face, underscoring the necessity for proactive risk management.
Definition of Liquid Staking Tokens: Liquid staking tokens allow holders to earn staking rewards without locking ETH directly, but they can depeg under market stress, leading to cascading liquidation risks for lending protocols.
Governance Controversy Intensifies: Green's criticism reflects broader discussions in DeFi governance regarding collateral quality, as Aave's loose standards may increase tail-risk exposure for depositors, impacting the stability of the entire DeFi ecosystem.

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Technical Analysis for AAVE

Technical Sentiment Analysis for Aave (AAVE). As of , Aave (AAVE) is exhibiting a Neutral technical sentiment. Our proprietary analysis, which aggregates 7 technical signals, shows that 4 indicators are flashing buy, while 3 are indicating sell.

Momentum Indicators: RSI, MACD & Overbought/Oversold Status. Currently, the Relative Strength Index (RSI) for AAVE stands at -, which suggests a Neutral condition. Meanwhile, the MACD (12, 26) indicator is at -, providing a Neutral signal for short-term momentum. Other oscillators like the Stochastic Oscillator at - and the Commodity Channel Index (CCI) at - further confirm a - outlook for the crypto.

Support, Resistance & Moving Averages. From a structural perspective, AAVE is trading below its 60-day moving average of $- and below its 200-day long-term moving average of $-. Key price levels to watch include the immediate resistance at $- and strong support at $-. A break above $- could signal a bull continuation, while falling below $- may test the next Fibonacci floor at $-.

Aave (AAVE) Support & Resistance Level

Name	S3	S2	S1	Pivot Points	R1	R2	R3
Classic	74.698	78.624	82.348	86.274	89.998	93.924	97.648
Fibonacci	78.624	81.546	83.352	86.274	89.196	91.002	93.924

About AAVE

Aave is a decentralized finance protocol that allows people to lend and borrow crypto.Lenders earn interest by depositing digital assets into specially created liquidity pools. Borrowers can then use their crypto as collateral to take out a flash loan using this liquidity.Aave (which means “ghost” in Finnish) was originally known as ETHLend when it launched in November 2017, but the rebranding to Aave happened in September 2018. (This helps explain why this token’s ticker is so different from its name!)AAVE provides holders with discounted fees on the platform, and it also serves as a governance token — giving owners a say in the future development of the protocol.

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.

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