Decentralized finance (DeFi) lending protocol Aave has achieved a historic industry milestone, surpassing $1 trillion in cumulative lending volume. This marks the first time any DeFi protocol has reached this threshold, solidifying Aave's position as the dominant force in on-chain lending.
Aave Labs CEO Stani Kulechov announced the achievement in an X post, framing it as a step toward the protocol's goal of becoming the "largest, most efficient liquidity network in the world." Kulechov emphasized a vision where "builders, banks, and fintechs plug into [Aave] by default," aiming to improve global liquidity and cost structures.
The protocol's growth is underscored by its current $27.2 billion in Total Value Locked (TVL), leading competitors like Morpho, JustLend, SparkLend, and Compound Finance. In the last 30 days alone, Aave generated $83.3 million in fees, nearly four times the amount of its closest rival, Morpho.
A significant driver of future growth is Aave's push into institutional finance. In August, Aave Labs launched Aave Horizon, a dedicated lending market on Ethereum for traditional finance firms. This platform allows institutions to borrow stablecoins using real-world assets (RWAs) as collateral. Early participants include asset management giants VanEck and WisdomTree, as well as digital asset securities firm Securitize.
Kulechov has also pointed to the tokenization of "abundance assets"—such as solar energy infrastructure, battery storage, and robotics—as a future growth vector, projecting these assets could be worth a combined $50 trillion by 2050.
However, the milestone arrives amidst internal community tension. A contentious DAO proposal asks AAVE token holders to approve a funding package worth up to $42.5 million in stablecoins and 75,000 AAVE tokens for Aave Labs. In return, Aave Labs would route all revenue from Aave-branded products to the Aave DAO treasury. The proposal has sparked debate over the balance of funding and control between the core development team and the decentralized autonomous organization.
Despite the protocol's operational success, the native AAVE token trades around $117, reflecting a decline of over 40% in the past year. Its market capitalization is approximately $1.8 billion, leading some analysts to note a Market Cap-to-TVL ratio below 0.1, which could indicate undervaluation relative to historical cycles.
