AAVE Climbs 1.1% Amid Whale Movements and Anticipation for V4 Update

Large-Scale AAVE Holder Shifts Millions to Decentralized Platform

Recently, a prominent investor transferred approximately $59.34 million into Aave V3, following a $3.3 million withdrawal from Kraken, as reported by Onchain Lens. This wallet now possesses 310,617 AAVE tokens, signaling a notable transition from centralized exchanges to decentralized liquidity pools. Such a move may impact Aave’s liquidity landscape and demonstrates increasing trust in the protocol’s underlying mechanics and infrastructure.

Aave Prepares for Major Upgrade and Strategic Partnerships

At the same time, Aave is gearing up for a significant product enhancement with the upcoming launch of Aave V4. The protocol is collaborating with Babylon, a Bitcoin staking initiative, to enable native Bitcoin-backed lending. This partnership will allow users to deposit actual BTC directly on the Bitcoin network and borrow stablecoins or other assets from Aave, eliminating the need for wrapped tokens or third-party custodians. Babylon’s trustless vaults will be integrated with Aave’s “centaur” framework, making this innovative feature possible.

The rollout of this functionality is scheduled for April 2026, following a testing period starting in early 2026. This integration is poised to unlock greater Bitcoin liquidity within DeFi and could transform the lending sector by allowing native BTC to serve as collateral. Additionally, Babylon plans to launch DeFi insurance products backed by Bitcoin, enabling BTC holders to earn returns while providing risk coverage for protocols.

DAO Refines Multi-Chain Strategy for Sustainable Growth

The Aave DAO is adjusting its approach to multi-chain deployment by discontinuing support for zkSync, Metis, and Soneium. This decision, ratified through a community vote on December 3, is part of a broader initiative to prioritize chains with stronger economic prospects. The new policy introduces a $2 million annual revenue benchmark for future deployments and implements a stablecoin reserve factor for chains with lower revenue. These measures underscore the community’s commitment to prudent resource management and financial sustainability.

AAVE Token Performance and Buyback Initiative

Despite these strategic changes, AAVE’s price has experienced short-term gains. On December 3, 2025, the token rose by 1.1% in a single day to reach $192.35, representing a 3.57% increase over the week and an 8.16% rise in the past month. This positive momentum aligns with the whale’s recent activity and ongoing advancements in product development and governance. Although total value locked (TVL) has dipped to its lowest point in five months, AAVE’s price action has signaled a bullish reversal, indicating renewed investor confidence in the protocol’s future.

To further strengthen the token’s value ahead of the V4 release, the Aave DAO has put forward a proposal for a $50 million annual AAVE buyback program. The anticipated upgrade aims to boost capital efficiency and enhance the user experience, solidifying Aave’s standing in the competitive DeFi sector. With significant investor moves, innovative partnerships, and governance reforms converging, Aave is entering a crucial stage in its evolution.