Retail investors panic as Aave is about to blow up; institutions are secretly accumulating AAVE tokens, and 90% of people get the direction wrong.

News core: Aave publicly updates on the rsETH incident progress.
Official service providers are evaluating two potential bad debt scenarios.
They have already received initial support commitments from multiple parties in the ecosystem.
Many people treat this news as a major negative.
But no one notices that **Aave actively disclosing risks is itself an advancement in DeFi governance**.
The market has already price in the bad debt expectations; instead, when the negative news is exhausted, it turns out to be good news.
In the short term, panic selling will drive AAVE below its previous low.
Smart money will take the bloody positions at this level.
After all, on-chain data shows that large holders have increased their AAVE circulating supply by 12% over the past three days.
In the long term, this crisis will directly reshape the risk-control standards for DeFi lending.
Going forward, top protocols will proactively disclose potential risks.
This will instead reduce the probability of black swan sudden crashes and improve the overall credibility of the entire sector.
Controversial view: **This incident is not a crisis for DeFi, but proof that DeFi is more reliable than CeFi**.
Last year, when FTX blew up, users couldn’t figure out the scale of bad debts for three months.
And within a week, Aave disclosed all scenarios, with a DAO coordinating solutions across the ecosystem.
Transparency is an order of magnitude better.
Do you think this incident will ultimately trigger a pullback in the DeFi lending sector, or will the negative sentiment be fully exhausted and lead to an upside rally?
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