Aave, one of many largest decentralized lending protocols, may see its web deposits soar to $100 billion earlier than the top of this yr, in line with the platform’s founder, Stani Kulechov.
In an Aug. 10 submit on X, Kulechov defined that the DeFi protocol’s present development price may push it to that determine ahead of anticipated.
Antonio Garcia-Martinez, Director of Base Advertisements at Coinbase, claimed that the $100 billion scale would place Aave among the many 35 largest banks on the planet and on par with Deutsche Financial institution.
Notably, US Federal Reserve statistics again the comparability, rating Aave’s deposit quantity forty first amongst US-chartered industrial banks. That places the DeFi large forward of established conventional monetary institutional names like Barclays.
These bullish positions are unsurprising contemplating Aave has skilled a robust upward trajectory this yr.
In July, the protocol surpassed $50 billion in web deposits for the primary time, and it has since added one other $11 billion, bringing its whole to $61.1 billion as of press time.
Knowledge from Token Terminal reveals that this offers Aave a commanding 66.7% share of the $91.7 billion DeFi lending market. By comparability, the following largest competitor, Morpho, holds simply $7.7 billion in deposits, making Aave practically eight instances bigger.
What’s driving Aave’s development?
Aave’s exceptional development is a product of its DeFi roots and displays rising curiosity from conventional finance and fintech corporations.
A chief instance is the current disclosure by an Ethereum-focused treasury firm, the Nasdaq-listed Blockchain Know-how Consensus Options (BTCS), that it makes use of Aave to generate yield and bolster its ETH holdings.
Aave’s development may also be linked to Ethena’s USDe stablecoin, which has seen important deposits into the lending protocol.
Based on Dune Analytics information, $6.4 billion of Ethena’s belongings are parked on Aave, which has elevated quickly in simply 10 days.
Nevertheless, USDe’s increasing publicity to Aave poses some dangers to the DeFi protocol’s rising footprint.
Threat administration agency Chaos Labs just lately cautioned that USDe’s rising presence may set off liquidity pressures. The agency pointed to in depth rehypothecation, the place collateral is reused throughout transactions, warning that systemic leverage may amplify market dangers.
