Bitcoin Rebounds to $88K, Aave’s Governance Proposal Drama

Cryptocurrency markets had a small rebound following last week’s dip, as investor activity wound down during the holidays.

Bitcoin (BTC) fell to a weekly low of $86,561 on Tuesday, before bouncing back above $88,600 on Friday, according to TradingView data.

Spot Bitcoin exchange-traded funds (ETFs) demand remained weak, recording $175 million in outflows on Wednesday, which marked a fifth consecutive day of net outflows, according to Farside Investors.

In the wider cryptocurrency space, members of the Aave community criticized their decentralized lending and borrowing protocol over what they described as a premature push to advance a governance proposal on brand asset ownership.

The proposal, which sought to return control of the protocol’s brand assets and intellectual property to a DAO-controlled entity, was rejected on Friday, with a majority voting against it.

Aave governance vote ends in rejection after community pushback

Aave token holders voted against a controversial governance proposal seeking to place control of the protocol’s brand assets under DAO ownership.

On Friday, the snapshot poll closed with 55.29% voting “NAY” and 41.21% abstaining. Only 3.5% of voters supported the proposal.

The proposal asked whether Aave (AAVE) token holders should regain control over Aave’s domains, social handles, naming rights and other intellectual property through an entity under a decentralized autonomous organization (DAO). Supporters framed the move as a step toward decentralization and clarifying questions about brand stewardship.

The rejection closed a tense governance episode for Aave, one of decentralized finance’s (DeFi) biggest lending protocols. It highlighted how timing, escalation and participation can shape governance outcomes in a DAO.

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DEX adoption, HIP-3 fuel $200 HYPE case as rivals threaten Hyperliquid’s dominance

Decentralized perpetuals exchange Hyperliquid has been among crypto’s breakout projects in 2025, but rivals’ lucrative rewards systems are vying to lure investors away.

Cantor Fitzgerald forecasts Hyperliquid’s HYPE (HYPE) token to surge to $200 by 2035. Hyunsu Jung, CEO of HYPE treasury company Hyperion DeFi argues that the surge will be fueled by the Hyperliquid Improvement Proposal 3 (HIP-3).

“We see HIP-3 as the major driver of Hyperliquid’s next phase of growth, and as a key enabler of the valuation framework proposed by Cantor,” Jung told Cointelegraph.

Perpetual swaps are futures derivative contracts that track the price of an underlying asset but have no expiration date. Contracts maintain their price close to the spot assets by a funding mechanism, which transfers payments between long and short position holders.

The market share of perpetual futures DEXs rose from 2.1% in January 2023 to a new all-time high of 11.7% in November 2025, according to a report by data aggregator CoinGecko.

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CZ proposes fix to address poisoning after investor loses $50 million

Binance co-founder Changpeng Zhao proposed additional security measures to “eradicate” address poisoning, including wallet warnings and blacklists of suspicious accounts.

“All wallets should simply check if a receiving address is a ‘poison address,’ and block the user. This is a blockchain query,” Zhao wrote in a Wednesday blog post.

Address poisoning is a form of phishing in which scammers trick victims into sending crypto to illicit wallets by first sending them small transactions. Unsuspecting users often copy and paste the attacker’s address from their wallet history.

Phishing scams cost 6,344 victims over $7.7 million in November, according to Scam Sniffer data. That number is expected to surge in December largely due to $50 million in USDT (USDT) lost by a single victim on Friday.

“Lastly, wallets should not even display these spam transactions anywhere. If the value of the [transaction] is small, just filter it out,” Zhao added.

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Ethena’s USDe lost $8.3 billion since October crash amid “loss of confidence”

Ethena’s synthetic dollar USDe has shed about $8.3 billion in net outflows since the major liquidation event on Oct. 10, as confidence in leveraged and synthetic collateral structures continues to weaken.

According to a report from 10x Research, the October sell-off marked a turning point for the crypto market, flipping the bull phase into a period of deleveraging. The crash erased an estimated $1.3 trillion in crypto market value, nearly 30% of total capitalization at the time.

Ethena USDe (USDE), which relies on synthetic collateral and hedging mechanisms rather than traditional fiat reserves, faced a “sharp loss of confidence” under these conditions, the analysts wrote.

According to data from CoinMarketCap, USDe’s market cap stood at nearly $14.7 billion on Oct. 9. In just over two months, that value has dropped to around $6.4 billion.

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Uniswap fee switch to go live as community vote set to pass

The highly anticipated Uniswap protocol fee switch, dubbed “UNIfication,” passed and was to go live later this week, having reached the 40 million vote threshold needed to trigger one of the biggest upgrades in the decentralized exchange protocol’s seven-year history.

Uniswap Labs CEO Hayden Adams said on Thursday that a successful vote would follow a two-day timelock period in which Uniswap v2 and v3 fee switches would flip on the Unichain mainnet, triggering the burning of more Uniswap (UNI) tokens.

The proposal will see 100 million UNI tokens burned from the Uniswap Foundation’s treasury, while a Protocol Fee Discount Auctions system to increase liquidity provider returns would also be implemented.

The changes are expected to significantly improve the supply-demand dynamics of the UNI token and make it a more appealing token to hold over the long term.

News of the UNIfication proposal in early November spurred a near 40% rally in the UNI token, taking it from about $7 to $9.70 on Nov. 11.

Uniswap is the largest decentralized exchange and has processed more than $4 trillion in trading volume since launching in November 2018. CoinGecko data shows that UNI is the 39th largest token by market cap, at $3.8 billion.

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DeFi market overview

According to data from Cointelegraph Markets Pro and TradingView, most of the 100 largest cryptocurrencies by market capitalization ended the week in the green.

The Pippin (PIPPIN) memecoin rose over 41% as the week’s biggest gainer, followed by the Canton (CC) token, up over 25% on the weekly chart.

Thanks for reading our summary of this week’s most impactful DeFi developments. Join us next Friday for more stories, insights and education regarding this dynamically advancing space.