Crypto lending is maturing, with stablecoin borrowing rates stabilizing around 6-8%. Aave has emerged as the clear leader after overcoming the chaos of 2022.
The Aave DAO stands on comfortable ground, and Aave protocol is a leader in DeFi lending, announced Marc Zeller, founder of the Aave Chain Initiative. The organization, which represents the interest of the Aave community, was launched in 2023, in the after math of the Terra (LUNA) and FTX crash.
Since then, Aave has evolved and rebuilt its positions. Zeller recalled that at one point, the community was convinced Aave should wind down, as DeFi is dead. However, over time, the project improved its codebase and became key in lending activity during the 2025 bull market.
Aave’s dominance is no longer threatened
According to Zeller, Aave is now well-established, based on value locked, revenue, market share, and borrowing volume. The DAO had a role in determining the conditions of lending and the available vaults, leading to success during the latest ETH bull market.
Aave carries a record $41.55B in value locked while generating $161M in annualized revenue, of which over $47M goes to holder incentives. As a result, AAVE holds around $299.48, close to its higher range. For now, AAVE has yet to revisit its records above $698, but the token has held steady and expanded during the 2024-2025 bull market.
Aave lending expanded to a new all-time peak, with native GHO tokens growing their supply to a record over 352M. | Source: DeFi Llama
Aave now dominates all DeFi verticals, including leveraged staking, borrowing stablecoins against BTC and ETH, and yield-generating collateral carry trades. Zeller is aware that Aave has taken over where other projects failed, and has attempted to secure the platform against liquidations and panic.
The native token, GHO, grew to 352M, based on the positive market performance. GHO is dynamically minted and destroyed based on the ability of Aave to support the stablecoin.
Unlike other DeFi projects, Aave limits the number of assets held as collateral. The project is also careful with costs and incentives, expanding its ability to generate predictable profits and avoid threats to liquidity.
Overall, DeFi has learned its harsh lessons from previous liquidation cascades and settled into a more mature state. Zeller noted that Aave lending settled at around 6-8% after previous rate hikes to over 16%. As of September, Aave achieved an 8.13% yield.
Aave expands to selected L2 chains
One of the major effects of Aave was to boost the economies of L2 chains. Zeller recalled the 2023-2024 bear market led to L2 fatigue, where too many chains were created. Aave launched on over 26 chains, and soon became the leading DeFi protocol.
However, Zeller estimated not all L2 versions were viable. Currently, around 86.6% of Aave revenues are made from Ethereum mainnet activity, with no need to bridge or take up additional transactions. Aave has estimated that around half of the deployments to L2 chains were not viable and has decided to limit its exposure to only key strategic networks.
The latest deployment was on Linea, following the chain’s token distribution. Aave managed to attract $2B in deposits to its Linea version, considering the chain more reliable. Recently, Linea also managed to secure record value locked, as Cryptopolitan reported.
