AAVE +3.51% in 7 Days After Aave Labs Acquires Stable Finance to Expand Retail DeFi Offerings

On OCT 26 2025, Aave (AAVE) rose by 0.06% within 24 hours to reach $226.43. Over the past seven days, it gained 3.51%, though it has dropped 17.48% in the last month and 26.68% year-to-date. The price action reflects ongoing investor focus on Aave’s expansion into retail-friendly DeFi products.

Aave Labs has announced the acquisition of Stable Finance, a San Francisco-based DeFi app focused on generating yield from stablecoins. The deal brings founder Mario Baxter Cabrera and his team into Aave’s ecosystem, furthering the project’s mission to offer accessible, consumer-facing DeFi services. The acquisition, announced on October 23, complements Aave’s recent strategic moves, including its integration with Maple Finance and the launch of its Horizon RWA marketplace.

With over $37 billion in total value locked (TVL), Aave continues to position itself as a leader in the DeFi space, particularly as demand for on-chain yield remains strong despite regulatory uncertainties. The acquisition of Stable Finance is expected to bolster Aave’s retail presence, especially as competitors such as Coinbase and Crypto.com also expand their DeFi yield offerings.

While U.S. lawmakers have passed the GENIUS Act, which restricts yield-bearing stablecoins, Aave’s on-chain lending protocols remain legally unaddressed, leaving room for continued growth. This regulatory ambiguity has created tension with traditional financial institutions but also opened new opportunities for decentralized finance to innovate and scale.

The acquisition also highlights the broader trend of DeFi projects strengthening their consumer-facing tools to capture a larger share of the retail market. As users seek more accessible and user-friendly yield-generating solutions, Aave’s move into retail DeFi is seen as a strategic response to evolving market demands.

Backtest Hypothesis

To assess the potential performance of Aave (AAVE) in response to market volatility and key events, a backtesting strategy could be implemented based on specific parameters. For example, one could analyze Aave’s performance following a 10% intraday drawdown in price, a common threshold used to identify significant market stress events.

The strategy could define a 10% drawdown as a trigger point and measure the subsequent price recovery over multiple time horizons, such as 1, 5, and 30 days. Additionally, risk-control rules such as a stop-loss or take-profit levels could be applied to simulate a real-world trading environment. By testing the performance after each such event, investors can better understand Aave’s historical behavior and potential for rebound following sharp price corrections.

This approach aligns with Aave’s recent volatility and provides a structured method for evaluating the token’s resilience to short-term market shocks. The results could inform both short-term trading strategies and long-term investment decisions.