AAVE Drops 0.48% Amid Acquisition and DeFi Expansion

On OCT 24 2025, Aave (AAVE) dropped by 0.48% within 24 hours to reach $227.84, according to market data. Over the 7-day and 30-day periods, Aave recorded a 2.43% increase and a 16.96% decrease respectively, while its annual performance was down 26.22%. The price movement reflects mixed investor sentiment in the wake of recent strategic developments and ongoing broader market dynamics.

Aave Labs has taken a major step in expanding its institutional footprint by acquiring Stable Finance, a startup known for its onchain savings app. The acquisition enhances Aave’s consumer-focused DeFi product offerings and aligns with its long-term strategy to bring more institutional-grade credit instruments into decentralized finance.

The integration of Stable Finance’s onchain savings platform into Aave’s ecosystem is expected to broaden access to stablecoin yields for retail users. Stable Finance’s app, which allows users to earn interest on crypto and fiat through stablecoin strategies, will be phased out in favor of Aave’s unified interface. This move underscores Aave’s focus on simplifying user experiences while maintaining technical depth.

The acquisition brings in Stable Finance’s founder, Mario Baxter Cabrera, who will serve as Director of Product at Aave Labs. His team will contribute to the development of new consumer-facing products that align with Aave’s mission to make DeFi more accessible and user-friendly. The acquisition also reflects Aave’s broader efforts to diversify its collateral types and expand beyond traditional crypto-native assets into structured credit instruments.

Aave’s strategic move follows its recent partnership with Maple Finance, which introduced a yield-bearing version of USDT as collateral in Aave’s Plasma market. This development marks a shift in the protocol’s approach to collateral, incorporating assets backed by institutional loans. The Plasma market now supports Aave syrupUSDT, a stablecoin backed by real-world institutional credit, which can serve as collateral but not as a loan asset. This innovation adds a layer of stability and diversification to Aave’s ecosystem.

Technical indicators for Aave suggest a consolidation phase following recent price fluctuations. While the short-term price decline is modest, the broader 30-day and 1-year trends indicate a bearish bias. Analysts project continued volatility in the near term as the market digests the implications of Aave’s institutional expansion and the broader DeFi landscape evolves.

The recent acquisition of Stable Finance by Aave Labs occurred just one day before the current date (2025-10-24). As a result, the event-impact backtesting engine lacks sufficient post-event price data to calculate meaningful returns or drawdowns. The current dataset contains only one closing price after the announcement, making it impossible to establish a return window.

To address this limitation, two immediate options are available:

1. Short-Horizon Price Reaction Analysis: A manual calculation of the 1-day price reaction (from 2025-10-23 close to 2025-10-24 close) can provide a snapshot of the immediate market response to the acquisition announcement. This approach is limited in scope but offers preliminary insights into investor sentiment.

2. Delayed Backtesting: A follow-up analysis can be scheduled after a waiting period (e.g., 10 or 30 days) to allow sufficient price data to accumulate. Once more data is available, the backtesting engine can compute meaningful metrics such as average 5-, 10-, or 20-day returns and determine optimal holding periods.

A combined approach—executing the short-term analysis now and scheduling a full backtest after a waiting period—may provide the most comprehensive understanding of the event’s market impact. Investors and analysts can use these insights to refine their strategies based on Aave’s evolving institutional integration and broader DeFi dynamics.