Decentralized lending protocol Aave continues to dominate in DeFi with its total net deposits climbing 55% in July and reaching past $60 billion in early August, breaking new all-time highs, per data from Token Terminal. Net deposits on a lending protocol represent the total assets deposited to the protocol, minus outstanding loans.
Total value locked (TVL) on Aave also surged more than 40% in July, a rise largely fueled by growing support for liquid staking tokens (LSTs) such as cbETH, wstETH, and wETH on Coinbase’s Base network, according to data from DefiLlama.
Aave TVL by chain. Source: DefiLlama
The vast majority of Aave’s TVL is on Ethereum, which grew 47% last month. However, on-chain metrics show that Aave’s TVL on Base also jumped significantly, growing over 40% in July to over $1 billion, outpacing the roughly 10% growth seen on other chains like Avalanche and Polygon during the same period.
The surge in net deposits has edged Aave closer to the size of the top 40 U.S. banks, per data from X user 0xKolten, the DeFi marketing director for Aave developer Avara.
Aave’s July growth is at least in part thanks to ETH’s price growth over the month, which likely supported broader DeFi activity across the Ethereum network. Ethereum posted strong price gains in July, with the price of ETH climbing nearly 50% from $2,400 to around $3,700, as spot Ethereum ETF saw record inflows and public companies jumped in to stock up on ETH for their treasuries.
ETH 1-month price chart. Source: CoinGecko
Mixed Results
It’s unclear, however, whether Aave’s growth last month was driven by ETH’s price action alone, as other lending protocols on Ethereum didn’t all fare quite as well.
SparkLend’s TVL, for example, rose by 38% from $5.28 billion at the start of July to $7.28 billion by July 22, before declining to $6.72 billion by early August, trimming its monthly gain to 27%.
Compound Finance, another lending protocol, grew more modestly, rising about 11% from $3.59 billion to roughly $4 billion over the month. Morpho recorded about the same increase as Aave, near 40%, its TVL climbing 39% from $6.57 billion to $9.14 billion in the same period, reflecting ongoing changes in liquidity movements among Ethereum-based lending platforms.
July also marked Aave’s second-highest revenue month since January, with the platform generating over $3.7 million, according to DefiLlama.
Amid the news of new growth milestones, the price of Aave’s native asset AAVE jumped 5% over the past 24 hours to $286.
As The Defiant previously reported, Aave’s rapid growth recently has sparked an increase in phishing attacks targeting users of the protocol. One Aave Ethereum USDT holder lost over $3 million in a phishing scam this week.
