Aave’s cumulative lending tops $1tn…moves to deepen links with traditional finance

Decentralized finance (DeFi) protocol Aave said its cumulative lending has surpassed $1 trillion.

According to Cointelegraph on the 25th (local time), Aave recently announced that its cumulative on-chain lending volume has exceeded $1 trillion—an industry first for DeFi. Stani Kulechov, CEO of Aave Labs, wrote on X on the 26th (local time) that “DeFi and Aave didn’t exist even 10 years ago,” adding that “today, Aave has become the backbone of on-chain lending.” He said the goal is to become “the world’s largest and most efficient liquidity network that builders, banks and fintech companies connect to by default.”

Aave currently has total value locked (TVL) of $27.2 billion. Users can take out instant loans using cryptocurrencies as collateral or earn interest on deposited assets. Fee revenue generated over the past 30 days totaled $83.3 million—about four times that of rival protocol Morpho.

Aave is also expanding touchpoints with traditional finance. In August last year, Aave Labs launched “Aave Horizon,” an Ethereum (ETH)-based, institution-only lending market. The market is designed to allow borrowers to take out stablecoins using real-world assets (RWAs) as collateral, with VanEck, WisdomTree and Securitize named as early participants.

Kulechov also said on the 15th of this month that tokenization of so-called “abundance assets,” such as solar power, energy storage batteries and robotics, could become a growth driver for DeFi lending. He projected the market size of this asset class could reach $50 trillion by 2050.

Still, debate over internal governance continues. Aave token (AAVE) holders are currently voting on a proposal to pay Aave Labs up to $42.5 million in stablecoins and 75,000 AAVE. If approved, Aave Labs would shift to a structure in which all revenue generated from its branded merchandise flows to the DAO treasury.