Headline: Aave weathers DAO vs. Labs drama — fundamentals hold as sentiment rebounds Aave (AAVE) briefly fell into the headlines for the wrong reasons in December, when a public clash between the protocol’s DAO and Aave Labs shook market confidence and knocked roughly $500 million off its market cap, according to on-chain analytics firm Santiment. Price and sentiment dipped as traders reacted to the governance dispute — but beneath the noise, the protocol’s fundamentals largely refused to follow suit. Why the pullback may be over - Sentiment reversed in early January: positive mentions began to outnumber negative ones just as the market stopped printing lower lows, suggesting traders are increasingly optimistic that the two sides are moving toward a resolution (Santiment). - On-chain activity picked up around local price lows in late December. Daily active addresses spiked and short bursts of network growth coincided with the market trough, and activity remained steady thereafter — evidence that users were still engaging with the protocol even during the sell-off. - Circulation rose during the dip, indicating tokens were being actively repositioned rather than withdrawn from the ecosystem. Fundamentals stayed intact - Total value locked (TVL) sits near $36 billion, only modestly below its peak and substantially higher than mid-year levels (DeFiLlama). - Protocol economics look healthy, with annualized fees around $700 million, pointing to robust revenue generation and continued user activity. Put simply: while headlines focused on governance drama, the Aave network kept operating without disruption and capital largely stayed put. That resilience helps explain why sentiment and price have begun to recover; much of the uncertainty now looks priced in. If the DAO–Labs dispute is resolved cleanly, Aave could be positioned to move forward with limited long-term damage. Disclaimer: This content is informational only and should not be taken as investment advice. Cryptocurrency trading is high-risk; do your own research before making any financial decisions. Sources: Santiment, DeFiLlama. © 2026 AMBCrypto. Read more AI-generated news on: undefined/news

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