Aave’s Kulechov confirms securities-backed lending as profit-driven pivot takes shape

Aave founder Stani Kulechov has announced that the decentralized lending protocol will be expanding beyond crypto-native assets into securities-backed loans and securities lending.

“Aave is expanding its TAM from Crypto assets to all assets with Securities-backend Loans and Securities Lending,” Kulechov wrote on X on June 26.

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, Kulechov published a pitch where he outlined how Aave V4’s architecture could bring three segments of Wall Street’s securities financing business, which are collateralized loans backed by securities, repurchase (repo) agreements, and direct securities lending, on-chain.

What is the scale of the opportunity for Aave?

The numbers Kulechov cited frame why Aave is making this bet. Daily exposures in the U.S. repo market average around $12.6 trillion. Margin financing adds another $1.3 trillion at record levels, and wealth-management securities-based loans contribute over $400 billion on top of that. 

Securities lending holds roughly $4.6 trillion in lendable assets and hit a record $15 billion in revenue last year, according to figures Kulechov shared in his June 19 post.

These figures dwarf DeFi lending, which Aave dominates, by a large margin. Aave’s peak deposits reached about $75 billion in 2025, and total borrowings have crossed $1 trillion. 

Under Kulechov’s proposal, tokenized securities would serve as collateral for borrowing stablecoins like Aave’s native GHO or other dollar-denominated tokens. 

Repo-style trades could settle in real time on-chain. Asset owners could lend tokenized securities directly and earn yield without intermediaries.

Kulechov also floated gold-backed loans as part of the real-world asset expansion on the same day, calling it “a trillion dollar opportunity long-term” in a separate post on X.

Aave’s current revenue strategy and institutional backing

In late May, Kulechov announced a pivot in Aave’s revenue strategy, stating that the protocol was committing to a 12-month “revenue-led protocol strategy.” This latest securities push is a sign that the strategy is alive and kicking. 

Aave currently generates around $123 million in annualized revenue and holds $12.4 billion in total value locked across more than 20 chains per DeFiLlama data.

Institutional interest is also pouring, as Standard Chartered analyst Geoff Kendrick initiated coverage of the AAVE token with a $3,500 price target by the end of 2030, citing Aave’s dominance in on-chain lending.

Grayscale has also filed for an SEC-approved Aave ETF and published a valuation report pegging AAVE’s fair value between $80 and $100, with a $175 bull case tied to regulatory clarity around tokenized assets.

Aave’s Horizon platform, built with VanEck, Circle, and Securitize, currently operates as one of the largest institutional real-world assets (RWA) lending marketplaces in DeFi. All these come together to give the protocol a foothold in the permissioned segment of tokenized finance.

What stands in the way of Aave’s target?

Apart from the technical infrastructural challenges that currently exist, adoption is a likely challenge as it goes further than smart contracts. 

Securities financing operates on decades of legal frameworks and deeply automated systems. For institutions to move these activities on-chain, blockchains would need to offer clear advantages in cost, settlement speed, or collateral mobility.

The recent spate of attacks on DeFi is also a valid cause for concern. Aave also suffered one of such attacks by proxy in April as a result of the KelpDAO rsETH exploit, which sent over $290 million in stolen tokens through Aave markets as collateral. 

That incident triggered depositor withdrawals and governance instability. An ecosystem intervention contributed to helping the affected parties bounce back. 

Aave has also had some internal scuffles this year, with three major DAO service providers, including risk manager Chaos Labs, departing or announcing plans to leave in recent months.

Despite all these headwinds, Aave’s next growth phase, according to Kulechov, goes beyond crypto-native demand and now extends into capturing even a sliver of Wall Street’s securities plumbing, a market he described as “one of the largest markets that almost nobody outside Wall Street thinks about.”