The global cryptocurrency market capitalization reached USD 3.71 trillion amid extreme greed sentiment. Aave's price has risen 46% since last week and is currently trading at half its all-time high. The Aave community is considering shutting down Polygon due to risks posed by new governance proposals. Chainlink and Ondo are seeing significant gains from new partnerships and organic adoption.
While the crypto market continues to trend upwards, with the global crypto market capitalization reaching USD 3.71 trillion (AUD 5.81 trillion), the fear and greed index remains in the realm of extreme greed.
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And although altcoin season hasn't arrived yet, some altcoins are outperforming Bitcoin, according to the Altcoin Season Index.
Altcoin Season Index, Source: blockchaincenter.net
One of the stocks that rose the most during the week was Aave (AAVE), up 46% from the previous week. Aave is currently trading at US$378.92 (AU$594.26), just over half of its all-time high (ATH) of US$666.68 (AU$1,045.57) from May 2021.
Aave (AAVE), annual chart, source: CoinMarketCap
Aave’s surge was partially driven by significant purchases from World Liberty Financial (WLFI), a DeFi protocol linked to Donald Trump, which caused an increase in demand and trading volume. However, despite this, the momentum of the rally has slowed slightly in recent days due to community concerns about the collaboration with Polygon.
The Aave community is considering ceasing operations on the Polygon network following Aave founder Marc Zeller's proposal to re-evaluate the risk profile of bridge assets.
Aave's proposal that X user 0xWenMoon could cease operations on Polygon is a reaction to Polygon governance proposals that could see assets on the network partially collateralized by Aave's competitors. explains.
This poses a significant risk to Aave as it exposes the liquidity provider to risks associated with competitors.
0xWenMoon's comments see Aave's move as a rational business decision and risk management strategy, as well as a strategic threat to Polygon, with the possibility of Aave exiting the network if the bridge proposal is accepted. It emphasizes one thing.
As a result of the recent Bridge Rehypothesis proposal, AAVE has just proposed effectively exiting Polygon.
I think most people would think this is an overreaction, but it's actually a pretty legitimate concern.
If the bridge proposal is accepted, the assets on the polygon will look like this: pic.twitter.com/idp51BgOPI
— 0xWenMoon 💙🧡 (@0xWenMoon) December 16, 2024
Link and Ondo continue their rally
Meanwhile, Chainlink (LINK) continues to climb towards $30 and is currently trading at $28.91 (A$45.36), up 29% from the previous week.
LINK, which was also on WLFI's shopping list, recently entered into an interesting new partnership with Emirates NBD Banking Group to bring Cross-Chain Interoperability Protocol (CCIP) to the Ronin network.
Related article: Ethereum poised to hit new all-time highs in Q1, analyst says
CCIP is becoming more and more powerful as adoption increases and collaboration with larger companies and banks increases.
Ondo (ONDO) is another mid- to large-cap cryptocurrency that has benefited from tokenization and institutional adoption. Ian De Bode, chief strategy officer at Ondo Finance, explained that he sees tokenization as a way for Trad-Fi players to “leverage cryptocurrency rails as a new distribution mechanism.”
Institutions are coming — what opportunities does tokenization offer them?
Ian De Bode, Chief Strategy Officer at Ondo Finance, explains how crypto rails serve as a powerful distribution mechanism for traditional assets and Ondo's unique capabilities. 👇 pic.twitter.com/WMyrzZgCOT
— OndoFinance (@OndoFinance) December 16, 2024
ONDO is up 30% from the previous week and is currently trading at US$1.99 (A$3.12), giving it a market capitalization of US$2.77 billion (A$4.34 billion).
