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09/22/2024

AAVE On-Chain Data: A Summary of Current Conditions

Key takeaways: * AAVE has a circulating market cap of $2.3 billion and an FDV of $24.6 billion. * 43,000 new AAVE tokens enter circulation every month. * On-chain data shows US-based funds dominate AAVE buying activity. * Most AAVE whales are currently in profit, but overall margins are thin. The P&L picture suggests most whales did not accumulate during the 2021 bull market, and the majority of tokens have seen significant turnover. * Addresses

AAVE On-Chain Data: A Summary of Current Conditions

Key takeaways:

  • AAVE has a circulating market cap of $2.3 billion and an FDV of $24.6 billion.
  • 43,000 new AAVE tokens enter circulation every month.
  • On-chain data shows US-based funds dominate AAVE buying activity.
  • Most AAVE whales are currently in profit, but overall margins are thin. The P&L picture suggests most whales did not accumulate during the 2021 bull market, and the majority of tokens have seen significant turnover.
  • Addresses actively accumulating AAVE hold substantial capital and are conviction buyers.

1. AAVE Overview

  • AAVE has a total supply of 16 million tokens. According to CoinMarketCap, current circulating supply is 14.93 million, with a market cap of $2.3 billion and an FDV of $24.6 billion.
  • AAVE's token distribution is split into two main buckets: 13 million tokens migrated from LEND in 2020, and 3 million tokens reserved for ecosystem incentives. Those 3 million are being added to circulating supply at a rate of 43,000 per month, allocated to two purposes: rewards for AAVE stakers and rewards for the Genesis team.
  • The AAVE Genesis wallet still holds 790,000 AAVE, worth approximately $122 million.

2. On-Chain Token Distribution

  • 2.1 Top 10 Holder Addresses:
    • On-chain data shows the largest AAVE holder is the staking contract, holding 2.99 million tokens.
    • Among the top 20 addresses, most are cold wallets belonging to projects and exchanges. Notable addresses include:
      • Address #9 — the LEND-to-AAVE migration address — still holds 330,000 AAVE worth $50 million. Given the multi-year gap, the private key for this wallet has very likely been lost. This portion of the supply can effectively be treated as burned.
      • Blockchain Capital, holding 233,000 AAVE, is the largest institutional investor. As an early AAVE backer, Blockchain Capital has not sold most of its position and continues to hold.
  • 2.2 General Token Distribution:
    • By holder category, AAVE is predominantly held by project-related addresses (37.29%), including staked tokens, which are counted as user-owned assets.
    • Binance holds 2.19 million AAVE, representing 13.07% of supply. Other exchanges include Coinbase, Kraken, Upbit, and others.
    • The majority of AAVE liquidity sits on Balancer, with 880,000 AAVE and $170 million in liquidity. AAVE's Uniswap liquidity stands at $13 million.
    • By blockchain distribution, the majority of the 16 million AAVE supply resides on Ethereum mainnet. Other chains include BSC (500,000 tokens) and Polygon (229,000 tokens).
  • 2.3 Staking Status:
    • AAVE staking has held relatively steady in the 2–3 million token range. After staking launched in 2020, it quickly reached 2.8 million by October, then peaked at 3.6 million in February 2021.
    • Stakers were not immune to the bear market. The 2022 bear market caused staked AAVE to drop sharply from 3.17 million to 1.97 million — a decline of 1.2 million tokens.
    • In the second half of 2023, as market conditions remained sluggish, staking saw additional consecutive declines.
    • After May 2024, staked AAVE recovered. It has since returned to 2.99 million tokens.

3. Exchange Token Flow Analysis

  • The chart above shows daily exchange deposit and withdrawal volumes. Yellow represents net daily inflows, blue represents net daily outflows, and the shaded area represents cumulative net flows. The second chart shows the average token amount per deposit/withdrawal, indicating whether activity is whale-driven or retail-driven. Higher values suggest whale activity; lower peak values suggest retail activity.
  • Looking at exchange flows, between August 4 (−89,000 tokens) and September 16 (+190,000 tokens), there was a net inflow to exchanges of approximately 280,000 tokens over roughly one month. That said, some ambiguity exists here. This data includes Coinbase, which offers Prime Custody services. AAVE deposited into Prime Custody should not be treated the same as a standard user deposit on Coinbase — in fact, users depositing AAVE into Coinbase custody signals long-term holding intent.
  • Looking at average deposit size, the average amount deposited per transaction is higher than the average amount withdrawn. The highest average deposit was on August 9, at 1,176 tokens per transaction, indicating whale activity. This is consistent with the Prime Custody hypothesis, as that service is typically used by large players.
  • Excluding Coinbase data and analyzing AAVE holdings on other exchanges, there is a clear net outflow from exchanges starting July 25 — dropping from 3.45 million to 3.28 million, a net outflow of 170,000 tokens.
  • The chart above shows cumulative token transfers between DEX wallets and CEX addresses (contract addresses). Note that timestamps are displayed in UTC.
  • From CEX data, the most active hours on centralized exchanges are 15:00, 16:00, and 17:00 UTC — which corresponds to 11 PM, midnight, and 1 AM Beijing time. These are peak US trading hours. Meanwhile, the lowest transfer volumes occur at 12:00 and 17:00 Beijing time, which aligns with Asian trading hours. This indirectly suggests that US-based funds have been driving AAVE activity in recent months.
  • From DEX data, the most active hour on decentralized exchanges is 21:00 UTC, followed by 17:00 and 07:00. Converting to Beijing time, the most active window is still around 8 AM. Overall DEX transfer volumes are also noticeably higher than CEX volumes.
  • Taken together, DEX and CEX transfer patterns confirm that the most active participants are operating in US time zones.

4. Deep Dive: Whale Holder Analysis

  • Note: The whale holders analyzed here exclude projects, DEXs, CEXs, MEV bots, DEX router addresses, CEX hot wallets, and other non-individual addresses. This set may still include institutional wallets.
  • Below is a summary of core metrics across whale holder addresses:
    • ROI: Over 75% of whale holders are in profit, but margins are not large. Median ROI is 20% and the maximum is 137%. However, 26% of whales are still underwater, with the largest loss at −66%.
    • HoldDay: HoldDay measures how long an address has held the token. The median is 287 days — roughly 9 months — meaning more than half of whale holders bought within the past year. The other half have held since before 2024. Only 25% of whale holders have held for more than 647 days (over a year). The longest-held address has been holding for 1,342 days.
    • TransactionsPerDay (TPD): TPD is the average number of transactions per day for an address — a proxy for on-chain activity level and indirectly for whether a holder is a long- or short-term participant. The median TPD for AAVE whale holders is 0.048, or roughly 1–2 transactions per month. This signals that AAVE whales rarely trade actively, which stands in sharp contrast to participants in the current memecoin and meme token trends.
    • AddressAge: The median wallet age is 654 days, and more than three-quarters of wallets are over 1,147 days old. This indicates that most of these wallets are not newly created and have been active for some time.
  • Overall, most AAVE whale wallets have been active for over 9 months, execute very few transactions per day, and are not frequent traders. They are mostly in profit, but overall margins are thin. The P&L distribution suggests most whale holders did not enter during the 2021 bull market, and most tokens have changed hands significantly since then.

5. Analysis: Whales Accumulating Over the Past 60 Days

  • Note: "Accumulating whale holders" refers to addresses that have made new purchases within the period — this group may overlap with the whale holder set above. For example, an address could appear in both the top-100 individual whale holder list and the accumulator list. If that address holds 50,000 tokens and recently bought 2,000 more, only the 2,000 new tokens are analyzed in this section.
  • 5.1 Distribution of Accumulation Amounts:
    • The chart above shows accumulation activity among whale holders over the past 60 days. The largest cluster is in the 0–1,000 token range (roughly $140,000), involving 23 addresses. The next group is 1,000–2,000 tokens, with 15 accumulators. The 2,000–12,000 range shows varied distribution, with counts dropping sharply above 14,000 tokens.
    • The largest single accumulator holds approximately 26,000 tokens, worth around $4 million.
  • 5.2 Accumulator Address Fundamentals:
    • Address Age Analysis:
      • The median AddressAge is 281.5 days — roughly 9 months — meaning more than half of accumulating whale addresses were created less than a year ago. Furthermore, 25% of accumulators have wallet ages of 42 days or less. Compared to the broader whale holder set (median age: 654 days), accumulator wallets are significantly newer, suggesting the recent buyers are genuinely new entrants.
    • TransactionsPerDay (TPD) Analysis:
      • The median TPD is 0.0731 transactions per day, or approximately 2 transactions per month. This indicates low trading frequency and limited on-chain activity, pointing to a long-term holding orientation rather than short-term speculation. This stands in clear contrast to high-frequency short-term traders and further suggests most accumulators are taking a cautious, measured approach.
    • TokenNum:
      • The number of distinct tokens held by an address reflects investment style — a higher count suggests diversification; a lower count suggests concentration. The median number of tokens held by AAVE accumulators is 4, including AAVE itself. This means 50% of accumulators hold fewer than 3 tokens, and 25% of addresses hold only AAVE.
  • 5.3 Total Asset Value of Accumulators:
    • The total asset value of accumulating addresses reflects their financial capacity and indirectly signals future buying potential. By bracket: 26 addresses hold $0–500K, 10 hold $500K–1M, 8 hold $1M–1.5M, and 9 hold $1.5M–2M. This confirms that AAVE accumulators are well-capitalized addresses. The largest single address holds $20.5 million in assets.
  • 5.4 Accumulator Portfolio Composition:
    • As expected, AAVE accumulators hold the most AAVE. The second and third most common holdings are ETH and USDT. Other assets include ONDO, USDC, UNI, FET, LINK, PENDLE, stETH, aETHAAVE, and USDT. The portfolio composition suggests accumulators favor established blue-chip projects over hot narratives and trending themes.