Aave government suggests freezing TUSD reserves to reduce potential risks, while the Aave token continues to record a price increase

Aave government suggests freezing TUSD reserves to reduce potential risks, while the Aave token continues to record a price increase

Aave government has proposed to freeze the TUSD (True USD) reserves in the AAVE V2 Ethereum pool in order to temporarily stop deposits and borrowings in TUSD. This is intended to reduce potential risks and uncertainties in relation to TUSD. So far, 83.76% of AAVE users have agreed to this proposal.

This measure could have a positive effect on the condition of the Aave protocol, since the number of daily active users decreased by 10.7% in the past week and the income achieved also dropped by 12.3%. Nevertheless, the Aave token recorded a massive price increase of 52.98% in the last month. The token is currently being traded at $ 72.68 and breaking through the resistance brand of $ 76.68 would mean an upward trend for AAVE.

The price increase led to an increase in the MVRV ratio of AAVE, which indicates that most token owners were profitable at the time of printing. However, the high profitability could lead to many owners sell their stocks with profit, which in turn could lead to a drop in prices.

The long/short difference at AAVE has dropped in the past few weeks, which indicates that many of the short-term owners may sell their shares and impair the growth of AAVE.

It remains to be seen how the freezing of the TUSD reserves and other factors will affect the long-term stability and safety of the Aave protocol.