Aave founder "Rate cuts will bring a 'DeFi bull market'"

Claims have emerged that rate cuts by the U.S. central bank could trigger a rally in the decentralized finance (DeFi) market.

On the 1st (local time), The Block reported that Stani Kulechov, founder of Aave (AAVE), said in a 'Token2049' discussion, "Rate cuts in all countries, including the United States and Europe, provide additional arbitrage opportunities for DeFi," and forecasted, "If interest rates fall, the DeFi yield market will enter a bullish phase."

He emphasized that governments' rate-cutting policies will provide attractive profit opportunities to market participants. Last month the U.S. Federal Reserve cut its benchmark interest rate by 0.25 percentage points. In addition, President Donald Trump is pressing for further rate cuts.

Kulechov said, "The first DeFi bull market began in the zero-interest-rate environment after COVID-19," and "At that time, DeFi's total value locked (TVL) surged from just a few billion dollars to $10 billion in a short period." He went on to explain that "infrastructure is now much more developed, and DeFi will move to a stage where it is integrated across finance and fintech systems and distributes returns."

Meanwhile, Aave's TVL grew rapidly this year, more than doubling from about $21 billion to $43.4 billion. According to DefiLlama, Aave's fee revenue generated over the past 30 days surpassed $99 million.