Decentralized lender Aave surpasses $50 billion in net deposits

Aave said it has become the first decentralized finance lending protocol to exceed $50 billion in net deposits as the onchain sector extended an uptrend that started in late October 2023.

Aave is a DeFi platform that enables users to lend and borrow cryptocurrencies without intermediaries. Lenders can deposit assets, such as stablecoins or cryptocurrencies like Bitcoin and Ether, into liquidity pools, earning interest. Borrowers can borrow from these pools by providing collateral, with interest rates set algorithmically based on supply and demand.

Net deposits, calculated as total supplied collateral minus outstanding borrows, reflect activity across Aave’s markets on 34 blockchains, including Ethereum, Arbitrum, Avalanche, and Base, to name a few. “Onward to trillions,” Stani Kulechov, founder of Avara, the company behind Aave, wrote on X, adding that traditional finance and fintech companies are increasingly adopting Aave as lending infrastructure.

In 2021, Aave launched a permissioned version of its lending protocol that incorporates KYC and anti-money-laundering checks to meet institutional demands. Dubbed Aave Arc, the technology was reportedly used for tokenized asset transactions in Project Guardian, a collaborative effort led by the Monetary Authority of Singapore to bring real-world assets onchain. Aave rolled out its Horizon initiative in March to target institutional RWA adoption using DeFi rails.

Rising cryptocurrency prices and increased stablecoin yield farming have likely also contributed to the DeFi lender’s growth. Additionally, Aave supports Circle’s USDC and PayPal’s PYUSD stablecoins as collateral, broadening access to offchain liquidity and interest-earning instruments.

The deposit landmark aligns with a broader DeFi resurgence. Sector-wide TVL neared $120 billion for the first time since December 2024, according to The Block’s data dashboard. Lending on Ethereum dominates the onchain ecosystem, with over $63 billion in value. DefiLlama data shows that Aave’s $29 billion in TVL accounts for nearly half of that amount, a nod to the protocol’s position as DeFi’s largest lender.

Aave’s governance community is backing upgrades, including “Aave V4,” which aims to introduce account abstraction and native real-world-asset vaults. Proposals also include support for Bitcoin Layer 2 assets and expansion of Aave’s GHO stablecoin to additional blockchains.

As of July 14, Aave’s governance token, AAVE, traded around $325.69, up over 7% in 24 hours amid a broad crypto market rally spurred by Bitcoin’s all-time high, The Block’s price page shows.