Is Aave on the Verge of Cracking Under Its Own DeFi Power?

Aave's dominance in the decentralized finance (DeFi) space is both its strength and its Achilles' heel. With a Total Value Locked (TVL) of $36.73 billion—nearly half of the entire DeFi market's $75.98 billion—Aave has become the backbone of decentralized credit systems. Yet, this central role raises concerns about systemic risk. If Aave stumbles, the Ripple effects could destabilize the broader market.

Governance concentration is a critical vulnerability. Sandeep Nailwal, Founder and CEO of Polygon Foundation, has flagged the protocol's reliance on Stani Kulechov, Aave's founder, who wields outsized influence over proposals and voting. Nailwal alleges Kulechov pressures other voters to align with his preferences, compounding risks in an already euphoric crypto bull run.