AAVE Rises 1.1% on Whale Activity and Upcoming V4 Upgrade

A major whale has deposited $59.34 million into Aave V3 following a $3.3 million withdrawal from Kraken, according to Onchain Lens data. The wallet, which now holds 310,617 AAVE tokens, has shown a significant reallocation of capital from centralized custody to decentralized liquidity pools. This move could influence liquidity dynamics in the Aave ecosystem and reflects growing confidence in the platform’s tokenomics and infrastructure.

Simultaneously, Aave continues to position itself for a key product upgrade with the development of Aave V4. The protocol is in collaboration with Babylon, a Bitcoin staking project, to introduce native Bitcoin-backed lending without the need for wrapped tokens or custodial intermediaries. Under the partnership, Babylon’s trustless vaults will integrate with Aave’s “centaur” architecture, allowing users to deposit native BTC on the Bitcoin base layer and borrow stablecoins or other assets from Aave’s markets.

The feature is expected to go live in April 2026 after a testing phase beginning in early 2026. This integration is a significant step toward unlocking deeper BTC liquidity in DeFi and could potentially reshape the lending market by enabling direct collateralization of native Bitcoin assets. Babylon has also announced plans to introduce DeFi insurance using Bitcoin collateral, which would allow BTC holders to earn yield while providing coverage for protocol risks.

The Aave DAO is recalibrating its multi-chain strategy by winding down deployments on zkSync, Metis, and Soneium. The decision, approved via a temperature check vote on December 3, is part of a broader effort to focus on more economically viable chains. The proposal sets a $2 million annual revenue threshold for new deployments and includes a stablecoin reserve factor for smaller revenue-generating chains. These changes reflect a disciplined approach to resource allocation and highlight the Aave community’s emphasis on financial sustainability and performance metrics.

Despite the ongoing strategic repositioning, the Aave token has shown a short-term positive trend. On December 3, 2025, Aave (AAVE) rose 1.1% in 24 hours to $192.35, marking a 3.57% increase in seven days and an 8.16% gain in the last 30 days. The price movement coincided with the whale’s activity and the broader narrative of product development and governance efficiency. While total value locked (TVL) has declined to a 5-month low, the token’s price confirmed a bullish reversal pattern, suggesting renewed investor interest in the protocol’s long-term roadmap.

The Aave DAO has also proposed a $50 million annual AAVE buyback program to bolster token value as the V4 upgrade nears completion. The upgrade is expected to enhance capital efficiency and user experience, reinforcing Aave’s position in a competitive DeFi landscape. With whale activity, product innovation, and governance improvements converging, Aave appears to be navigating a pivotal phase in its development cycle.