Aave founder, Stani Kuleshov, announced that the decentralized lending protocol will expand beyond native crypto assets into securities-backed loans and securities lending.
“Aave is expanding its TAM from crypto assets to all assets with back-end loans and securities lending.” Kuleshov wrote about X On June 26th.
This expansion will see Aave V4 become a bridge between DeFi infrastructure and traditional financial markets worth trillions of dollars.
A week earlier, on June 19, Kuleshov published a presentation in which he explained how the Aave V4 architecture could bring three segments of Wall Street’s securities finance business, namely secured loans backed by securities, repurchase agreements (repos), and direct securities lending, on-chain.
How big is the opportunity for Aave?
The numbers cited by Kuleshov explain why Aave made this bet. The average daily exposure in the US repo market is approximately $12.6 trillion. Margin financing adds another $1.3 trillion at record levels, and securities-based loans to wealth management contribute more than $400 billion on top of that.
Securities lending contains nearly $4.6 trillion in loanable assets, and reached a record $15 billion in revenue last year, according to Kulichov’s numbers. He shared his post on June 19.
These numbers dwarf DeFi lending, which is dominated by Aave, by a significant margin. Aave’s deposits peaked at about $75 billion in 2025, and total loans exceeded $1 trillion.
Under Kuleshov’s proposal, tokenized securities would serve as collateral for borrowing stablecoins like Aave’s native GHO or other dollar-denominated tokens.
Repo-style trades can be settled in real-time across the chain. Asset holders can lend tokenized securities directly and earn returns without intermediaries.
Kulichov also floated gold-backed loans as part of a real-world asset expansion on the same day, calling it a “trillion-dollar opportunity in the long term.” Separate post on X.
Aave’s current revenue strategy and institutional support
In late May, Kulichov announced a pivot to Aave’s revenue strategy, noting that the protocol was committing to a 12-month “revenue-led protocol strategy.” The final payment of securities is a sign that the strategy is alive and effective.
Aave currently generates approximately $123 million in annual revenue and has $12.4 billion in total value locked across more than 20 chains per Devilama data.
Institutional interest is also flowing in, with Standard Chartered analyst Jeff Kendrick starting coverage of the AAVE token with a target price of $3,500 by the end of 2030, citing Aave’s dominance in on-chain lending.
It has gray too Filed for SEC approved Aave ETF It published a valuation report that pegs the fair value of AAVE between $80 and $100, with a $175 upside case tied to regulatory clarity around the tokenized asset.
Aave’s Horizon platform, built in collaboration with VanEck, Circle, and Securitize, currently operates as one of the largest real-world institutional asset (RWA) lending marketplaces in DeFi. All of these elements come together to give the protocol a foothold in the permitted portion of token funding.
What stands in the way of Aave’s goal?
Aside from the technical infrastructure challenges that currently exist, adoption is a potential challenge because it goes beyond smart contracts.
Securities finance operates over decades of legal frameworks and deep automated systems. In order for organizations to move these activities across the chain, blockchains will need to offer clear advantages in terms of cost, settlement speed, or lateral mobility.
The recent wave of attacks on DeFi is also a good cause for concern. Aave also suffered one such proxy attack in April as a result of the KelpDAO rsETH exploit, which sent over $290 million worth of stolen tokens through Aave’s marketplaces as collateral.
This incident led to the withdrawal of depositors and instability of management. Ecosystem intervention helped the affected parties recover.
Aave has also faced some internal squabbling this year, with three major DAO providers, including risk manager Chaos Labs, leaving or announcing plans to leave in recent months.
Despite all these headwinds, Aave’s next growth phase, according to Kuleshov, goes beyond domestic demand for cryptocurrencies and now extends to acquiring even a small slice of Wall Street securities, a market he described as “one of the biggest markets that almost no one outside of Wall Street is thinking about.”
