Aave Says Stock, Bond Financing Markets Can Move On-Chain

Aave said it plans to bring a broader swath of financial markets onto blockchain infrastructure.

On June 20, Aave founder Stani Kulechov wrote on X, formerly known as Twitter, that securities-backed lending, repurchase agreements and securities lending markets can all move on-chain. He added that the shift would start with Aave V4, the protocol’s next version.

Kulechov said the US repo market has average daily exposure of about $12.6 trillion. He estimated the margin lending market at $1.3 trillion and the securities-backed lending market in asset management at more than $400 billion.

He said those markets rely on intermediaries such as custodians, prime brokers and clearing firms, which adds costs and inefficiencies and creates room for a transition to blockchain-based infrastructure.

Aave plans to implement that strategy in V4 through a hub-and-spoke structure. The model lets multiple markets share a single liquidity hub and is designed to handle on-chain loans backed by tokenized stocks and bonds, as well as repo and securities lending transactions.

Kulechov said Aave already has $23 billion in liquidity and its native stablecoin, GHO. That, he said, has established the foundation for moving collateral and liquidity infrastructure in securities markets on-chain.