AAVE Price Surges 19% After Trump’s DeFi Venture Announcement

Aave (AAVE) saw a sharp price surge following the announcement of Donald Trump’s’ DeFi initiative, World Liberty Financial. The project aims to build a decentralized financial system using Aave’s non-custodial lending platform and Ethereum infrastructure.

Gabriel Shapiro, a legal adviser on the project, clarified that it would act as a “lightweight non-custodial feeder” into Aave, allowing users to deposit without creating a fork. This venture aims to introduce Trump supporters to DeFi. In doing so, it has boosted confidence in Aave’s potential mainstream adoption and is driving speculative buying.

AAVE Rises By Over 19%, Eyes $150 Next

The AAVE/USD daily chart reflects the Trump Pump, with the token jumping over 19% to trade around $140.

This breakout followed a successful rebound from the lower trendline of an ascending channel pattern that had been in place since mid-June. As of Sept. 4, AAVE is approaching the 0.786 Fibonacci retracement level near $137.50, a crucial resistance point that could dictate further upside momentum.

Technical indicators also highlight strength. The relative strength index (RSI) has climbed back above 57, increasing buying pressure while leaving room for additional gains.

Additionally, AAVE has exceeded the 50-day exponential moving average (EMA) at $114, suggesting continued bullish momentum. If AAVE breaks past the $137.57 resistance, the next target could be the channel’s upper trendline near $153.68, aligning with the 1.0 Fibonacci extension level.

Conversely, rejecting this resistance could lead to a pullback toward the $124.92 support level, which coincides with the 0.618 Fibonacci retracement.

AAVE, Sky Partnership

Furthermore, on Sept. 2, Aave and Sky (formerly Maker), two leading decentralized finance (DeFi) protocols, announced a partnership aimed at “closing the gap between DeFi and traditional finance (TradFi).”

A proposal from Phoenix Labs, a DeFi research and development firm, drives the “Sky Aave Force” initiative. It aims to establish a market for USDS, Sky’s new stablecoin, on Aave v3. The plan includes distributing SPK tokens, the native token of Sky’s subDAO Spark, to incentivize liquidity, with up to 3.33 million SPK tokens allocated monthly for yield-bearing sUSDS deposits.

A proposed USDS Direct Deposit Module (D3M) would also allow Sky to mint USDS directly into Aave’s lending markets, enhancing liquidity without requiring the usual collateral.

The proposal to incentivize liquidity and deposits of sUSDS (a yield-bearing token) on Aave v3 could boost overall activity on Aave’s platform. As liquidity providers and borrowers interact with Aave’s markets, demand for the AAVE token—used for governance and staking in the protocol—could rise.