Why Is Aave Coin Price Soaring Today?

AAVE, the native cryptocurrency of the Ethereum-based decentralized custodial platform Aave, has staged a strong recovery surging past $100 today. As of press time, the AAVE coin price is trading 12% up at $100.27 with a market cap of $1.49 billion.

Why Is the Aave Coin Price Soaring?

As per the latest report, the governance proposal has been the major reason behind the AAVE surge. This governance proposal plans to bring a fee switch along with a token buy-back program.

Mark Zeller, the founder of the Aave-Chan Initiative, explained that the AAVE fee switch proposal plans to bring a major change to the Aave protocol‘s revenue model. This will introduce a mechanism in order to collect transaction fees by using the funds to buy back the AAVE tokens from the open market.

Leveraging the introduction of Umbrella,

It’s time to upgrade the $AAVE role in our ecosystem.

Let’s explore this together:https://t.co/70z1jD2pjf pic.twitter.com/He7XPyzkT0

— Marc “Billy” Zeller 👻 🦇🔊 (@lemiscate) July 25, 2024

If Aave implements this governance proposal, it could generate more than $60 million in annual revenue for AAVE holders. As per the data from DeFiLlama, the Aave protocol has currently more than $12.869 billion in total value locked.

Along with the surge in the Aave price, the network activity on the Aave Protocol has also increased considerably.

Also Read: Ethereum Foundation Moves 92,500 ETH, Ether ETF Outflows Surge

AAVE Price Surge to Continue?

If the bulls manage to sustain the Aave Coin Price above $100, there’s a high chance of a price rally to continue to $110 and further to $130 in the medium term. Amid the current surge, AAVE has recouped the losses over the past week and is up by 10.51% over the past month.

The good thing is that the Aave Coin price is trading above the 200-day moving average which indicates a favorable growth potential. Additionally, the AAVE altcoin has strong support from the crypto exchange Coinbase which added Aave perpetual futures providing a strong liquidity thrust to the cryptocurrency.

In the past 24 hours, the AAVE trading volume has surged by 65% and is currently around $216 million. Furthermore, Aave’s yearly inflation rate has reached a low of 2.29% which could result in less circulating market supply. As a result, market analysts are hinting at the possibility of AAVE price rallying to $200.

Also Read: Ethereum Options Expiry: 500K Contracts Set to Expire Today