**AAVE Faces Steep Price Drop Amid Governance Issues and Heavy Selling**

The AAVE token, the main asset of the Aave decentralized finance (DeFi) platform, has seen a sharp drop in price, falling 18% over the past week. This makes it the worst-performing coin among the top 100 cryptocurrencies, even as Bitcoin and Ethereum held steady. The decline seems to be tied to ongoing issues with Aave’s internal governance and decision-making processes.

**Aave’s Internal Conflict Shakes Investor Confidence**

Aave is currently dealing with a governance crisis that has raised concerns among investors. The dispute centers around who controls the Aave brand, its domain names, and how it communicates with the public. This disagreement has played out on online forums and social media, creating uncertainty around the protocol’s future direction.

While the overall crypto market remains relatively stable, AAVE’s specific issues are driving its price down. Investors appear more concerned about these internal problems than broader market trends, leading to increased selling pressure on the token.

**Large Sell-Off and Founder’s Response**

Blockchain data from Onchain Lens shows that a major investor recently sold about 230,000 AAVE tokens—worth around $35 million at current prices. This big move added to market panic, causing AAVE’s price to drop about 10% in a single day. The investor reportedly moved funds into Ethereum derivatives and Bitcoin instead.

This sell-off happened just as a key governance proposal was heading to a community vote. Meanwhile, wallets linked to Aave’s founder, Stani Kulechov, have been buying AAVE during the dip. Reports indicate he bought approximately $12.6 million worth of AAVE at an average price of $176 per token. However, with the price dropping further, those tokens are now showing an unrealized loss of about $2.2 million.

Even though founder purchases can signal confidence in a project, they haven’t been enough to stop the downward momentum. Investors seem to be staying in crypto overall but pulling out of projects facing internal turmoil.

**Uncertainty Around Aave’s Future Direction**

A big reason for AAVE’s drop is that there’s no clear timeline for resolving these governance issues. The debate over who manages Aave’s brand and communication channels adds complexity to how the decentralized autonomous organization (DAO) operates outside of smart contracts.

As long as this uncertainty continues, AAVE may continue to struggle—even if the broader crypto market holds strong. For now, many investors are taking a cautious stance until there’s more clarity on how these governance matters will be settled.