CIRCLE VENTURES ACQUIRES $AAVE TO STRENGTHEN DEFI INFRASTRUCTURE

Editorial note: The claim that Circle Ventures acquired $AAVE tokens could not be verified through credible third-party sources at the time of publication. The volume of any such purchase has not been disclosed. What has been independently confirmed is Circle's active engagement with Aave's governance and its participation in the broader DeFi United recovery effort outlined below.

DeFi United: The Backstory

@Circle's involvement with @aave comes at a critical moment for decentralized finance. On April 18, 2026, attackers exploited a vulnerability in KelpDAO's LayerZero bridge, minting 116,500 unbacked rsETH tokens worth approximately $292 million. The attacker deposited nearly 90,000 of those tokens into Aave as collateral and borrowed around $190 million in ETH and other assets — leaving the protocol holding what amounted to bad debt it could not liquidate.

The fallout was swift. According to CoinDesk, the total value of assets on Aave plunged by roughly $10 billion in the immediate aftermath, as users rushed to withdraw available funds.

Circle's Role and the DeFi United Response

In response, Aave service providers launched "DeFi United," a cross-protocol relief fund designed to restore the backing of rsETH and prevent a wider bad-debt crisis across DeFi's largest lending protocol. The initiative drew commitments from Lido, EtherFi, Mantle, Ethena, Frax Finance, and Aave founder Stani Kulechov, who personally committed 5,000 ETH. By April 25, the fund had raised approximately $160 million, with Mantle and Aave DAO together pledging 55,000 ETH.

Circle's chief economist, Gordon Liao, separately proposed emergency changes to Aave's USDC interest rate parameters after the exploit pushed the pool to 99.87% utilization — effectively locking liquidity for withdrawals. The proposal, submitted to Aave's governance forum, suggested raising the pool's Slope 2 rate from around 10% to as high as 50% to attract fresh capital and ease the crunch. Liao noted the post reflected his personal views and did not represent Circle's official position.

The token volume tied to any $AAVE purchase by Circle Ventures has not been publicly disclosed. The firm has not issued a formal statement on governance participation at the time of publication.

Sources:
CoinDesk – Aave Rallies DeFi Partners After $292M KelpDAO Hack
AMBCrypto – Circle Economist Outlines Aave Proposal
Bitcoin.com News – DeFi United Secures $160M

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