Stani Kulechov, Aave maker, said lower rate cuts from central banks could push for a new DeFi summer.
He talked about his outlook and predictions during Token2049, which is taking place in Singapore. Kulechov believes steep rate cuts will boost DeFi yields and tokenized assets across the crypto market.
“I think every single rate cut by a central bank, whether it’s by the Fed or ECB … is basically additional arbitrage for these DeFi yields. As rates are gonna go down, we’re gonna see a really good bull market for DeFi yield.”
Kulechov links rate cuts to DeFi growth
Kulechov said low borrowing costs will make on-chain yields more attractive compared to traditional finance. During the last era of near-zero rates after 2020, DeFi’s total value locked surged from under $1 billion to $10 billion in just months. He believes today’s advanced crypto infrastructure makes DeFi ready for another expansion. However, this time it will be with tokenized assets.
“So now, we’ve built this really amazing DeFi infrastructure … And we’re gonna go to a phase where DeFi actually can be embedded into the broader financial and fintech system and distribute yields,” Kulechov told the host at Token2049.
The first ever DeFi summer of 2020 happened during the COVID-19 pandemic. It was driven by a mix of ultra-low interest rates, generous liquidity mining incentives, and the rise of stablecoins. During that time, central banks around the world slashed borrowing costs in response to COVID-19. Because of that, investors start looking for higher yields elsewhere. And this is when they pivoted from traditional finance to crypto.
Decentralized finance dApps like Compound, Aave, and Yearn Finance attracted users with lucrative token rewards. Stablecoins such as USDC and USDT provided the required liquidity for lending and borrowing.
The Federal Reserve kept rates steady throughout the year. However, the bank decided to cut rates by 25 basis points (bps), lowering borrowing costs to a range of 4 to 4.25%. President Trump has been pushing for more easing. He even threatened to fire Fed Chair Jerome Powell and nicknamed him “Mr. Too Late” because he keeps delaying rate cuts.
According to rwa.xyz, the total value of on-chain real-world assets is standing at $31.77 billion. This is a massive jump by 1,665% when the total value was ~$1.8 billion in 2021. The site shows that there are 419,360 RWA holders globally, while the number of tokenized asset issuers stands at 222.
The Aave protocol has seen strong growth as well. It has a total value locked (TVL) of $43.331 billion across 11 chains. DeFiLlama is showing that Aave has grown significantly from around $6 billion in 2024 to over $43 billion today.
Last year, the DeFi protocol generated revenues of $84.24 million. That’s up by +183.14% compared to 2023. As of today, Aave has earned $83.51 million in 2025 and is on the road to breaking its previous record.
Aave currently ranks 43rd on CoinGecko with a market cap of $4.35 billion. Aave’s token price is up by 74.8% year to date (YTD) and currently trades at $285.46 with a 24-hour volume of $431 million.
