Aave Token Hits Two-Year Low After Chaos Labs Exit

The native token of the Aave decentralized finance protocol plunged to a nearly two-year low on Tuesday, dropping more than 6 percent in the past 24 hours to as low as 83.92 before partially recovering to around 94.66. The sharp decline, which has erased roughly 75 percent of its value since an August 2025 peak near 356, comes amid escalating governance tensions within the Aave decentralized autonomous organization, highlighted by the exit of key risk management firm Chaos Labs.

Chaos Labs, one of two primary risk operators for Aave since November 2022, announced its departure on Monday, citing contributor exits from the ecosystem, an expanded risk scope following the recent launch of Aave's V4 protocol, and unsustainable operational losses. The firm, which priced loans and managed risk across Aave's V2 and V3 markets without incurring material bad debt, declined an offer to nearly double its annual fee to 5 million dollars. Founder Omer Goldberg stated on X that continuing under current conditions would compromise the standards required for the world's largest DeFi application.

Aave founder and CEO Stani Kulechov acknowledged the decision in a post on X, expressing respect for...