Aave's exploration in the DeFi insurance field, through the Chimera Protocol, impacts its token value. By covering 10% of TVL ($1.5 billion) and reducing user losses by 40%, it enhances security. New deposits rose 25% post - launch. The 0.5% insurance fee sharing to AAVE stakers creates a deflationary loop. AAVE's price now has a 0.7 correlation with insured assets (up from 0.5 pre - insurance). As it expands coverage to 30% of TVL, AAVE's value could increase significantly, attracting more risk - averse investors.​