Stani Kulechov Unravels DeFi Partnership Drama with WLFI

Aave founder Stani Kulechov has validated the ongoing partnership between the Aave protocol and World Liberty Financial (WLFI) amid recent conflicting claims and market speculation. The controversy centered on an October 2024 governance proposal suggesting AaveDAO, the governing body of the Aave protocol, would receive 7% of the total WLFI token supply and 20% of protocol revenues from the WLFI deployment on Aave v3. Following reports that the WLFI team denied the 7% token allocation claim as "fake news," the Aave token (AAVE) experienced significant price volatility, dropping over 8% before stabilizing at around $352.

The WLFI team initially proposed the allocation as part of an arrangement where Aave would serve as a lending ecosystem partner. The proposal outlined a trustless smart contract mechanism to allocate protocol fees directly to the AaveDAO treasury. Kulechov responded to the confusion by affirming the validity of the proposal and described it as “the art of the deal,” reinforcing the ongoing nature of the partnership. Additionally, he noted that the Aave treasury would receive WLFI tokens valued at approximately $2.5 billion, positioning Aave as a major beneficiary of the arrangement.

Despite the WLFI team’s denial, Aave’s governance forum records show that the proposal was approved by AaveDAO. The debate has underscored the complexities inherent in DeFi partnerships, where governance transparency and decentralized decision-making are key, but also prone to misinterpretation and misinformation. The situation reflects broader dynamics in the DeFi space, where institutional interest is growing, and regulatory uncertainty persists.

The DeFi sector as a whole has seen renewed interest, with total value locked (TVL) in DeFi protocols currently exceeding $167 billion, a significant increase following the 2024 U.S. elections. This surge is attributed to expectations of a more crypto-friendly regulatory environment. Aave, as one of the largest DeFi protocols with a TVL of over $38 billion across multiple chains, has played a central role in this growth. Its recent expansion to non-EVM chains like Aptos highlights its strategic push for broader adoption and technological diversification.

Analysts have linked Aave’s recent price movement to several factors, including the WLFI partnership rumors, the launch of Aave on Aptos, and the dovish remarks by Federal Reserve Chair Jerome Powell at the Jackson Hole Economic Policy Symposium. The cumulative effect of these events appears to have bolstered investor confidence in Aave’s strategic direction and its potential role in shaping the future of DeFi infrastructure.

The incident also raises important questions about the reliability of information in the DeFi ecosystem and the challenges of managing public perception in an environment where governance decisions are community-driven. As DeFi protocols continue to attract institutional investors and regulatory scrutiny, transparency and clear communication will remain critical to maintaining trust and fostering sustainable growth.

Source:

[1] "Aave will receive 7% of the total WLFI tokens" event ... (https://www.chaincatcher.com/en/article/2199960)

[2] Aave — The DeFi Lending Giant That Changed Everything ... (https://medium.com/coinmonks/understanding-aave-the-defi-lending-giant-that-changed-everything-39da0ebdba52)

[3] 3 Potential Reasons for AAVE's Stunning Performance (https://www.coindesk.com/markets/2025/08/23/aave-leads-top-40-cryptocurrencies-with-19-surge-in-one-day-here-s-what-s-driving-it)