Aave, one of the largest decentralized lending protocols, could see its net deposits soar to $100 billion before the end of this year, according to the platform’s founder, Stani Kulechov.
In an Aug. 10 post on X, Kulechov explained that the DeFi protocol’s current growth rate could push it to that figure sooner than expected.
Antonio Garcia-Martinez, Director of Base Ads at Coinbase, claimed that the $100 billion scale would place Aave among the 35 largest banks in the world and on par with Deutsche Bank.
Notably, US Federal Reserve statistics back the comparison, ranking Aave’s deposit volume 41st among US-chartered commercial banks. That puts the DeFi giant ahead of established traditional financial institutional names like Barclays.
These bullish positions are unsurprising considering Aave has experienced a strong upward trajectory this year.
In July, the protocol surpassed $50 billion in net deposits for the first time, and it has since added another $11 billion, bringing its total to $61.1 billion as of press time.
Data from Token Terminal shows that this gives Aave a commanding 66.7% share of the $91.7 billion DeFi lending market. By comparison, the next largest competitor, Morpho, holds just $7.7 billion in deposits, making Aave nearly eight times larger.
What is driving Aave’s growth?
Aave’s remarkable growth is a product of its DeFi roots and reflects increasing interest from traditional finance and fintech companies.
A prime example is the recent disclosure by an Ethereum-focused treasury company, the Nasdaq-listed Blockchain Technology Consensus Solutions (BTCS), that it uses Aave to generate yield and bolster its ETH holdings.
Aave’s growth can also be linked to Ethena’s USDe stablecoin, which has seen significant deposits into the lending protocol.
According to Dune Analytics data, $6.4 billion of Ethena’s assets are parked on Aave, which has increased rapidly in just 10 days.
However, USDe’s expanding exposure to Aave poses some risks to the DeFi protocol’s growing footprint.
Risk management firm Chaos Labs recently cautioned that USDe’s growing presence could trigger liquidity pressures. The firm pointed to extensive rehypothecation, where collateral is reused across transactions, warning that systemic leverage could amplify market risks.