Stani Kulechov on June 19 pitched Aave V4 as a bridge between Wall Street and DeFi, arguing that bringing securities finance on-chain could unlock a multi-trillion dollar market and accelerate institutional adoption of crypto-native infrastructure.
Specifically, this initiative would target three parts of Wall Street’s securities finance industry: collateralized loans backed by securities, repurchase agreements (repurchase agreements), and securities lending. The concept was put forward by Stani Kulechov in his blog post on X and described by him as “one of the biggest markets that almost no one outside of Wall Street thinks about.”
The numbers behind the field
Kulechov backed up his claims with figures that illustrate the magnitude of the opportunities. He claims that the US repo market alone accounts for an average daily balance of about $12.6 trillion. There is another $1.3 trillion available through margin financing and more than $400 billion through collateralized asset management lending. In turn, the securities lending market includes $4.6 trillion in loanable assets and produced a record high of $15 billion in revenues by 2025.
https://t.co/Qq1RLyvQVy
— Stani (@StaniKulechov) June 19, 2026
Compared to the figures mentioned above, the current DeFi lending sector is relatively insignificant. Aave has proven to be the largest decentralized credit protocol by market share. The highest deposits in 2025 were about $75 billion and total loans exceeded $1 trillion. These numbers may seem impressive for the crypto market, but they are still small compared to the traditional securities finance market.
How Aave V4 can help move the financing of securities in the chain
Aave V4 is an Ethereum-based protocol that follows the hub-and-spoke framework. There is a common liquidity layer at the core, and several ‘spokes’ act as credit markets in their own right, each defining its own collateral parameters, risk settings and liquidation mechanisms, yet sharing the common liquidity pool. This approach makes it possible to operate multiple markets simultaneously without setting up different liquidity pools for each of these markets.
Stani Kulechov has described it as a potential link to securities financing. His idea is that tokenized securities can be used as collateral to borrow stablecoins, such as GHO, or other dollar-denominated coins.
In addition, there is a change in the approach to the settlement process. Transactions based on the repo model can be settled on-chain in real time instead of waiting until the end of the T+1 or T+2 settlement period. In the case of the securities lending framework, the tokenized assets would be made loanable and directly monetized by their owners.
This process may consist of one common liquidity center or of multiple centers based on different types of collateral, depending on the nature of the assets and the level of risks associated with them. One liquidity center improves liquidity, while several liquidity centers improve risk isolation. According to Kulechov, a practical solution is to first have one liquidity center and then move to different liquidity centers as the types of collateral increase.
Why this matters for crypto markets
Kulechov’s proposal is ultimately a bet that the next growth cycle in DeFi will emerge not thanks to crypto-native products, but via the adoption of the plumbing of traditional finance on-chain.
Aave is already a leader in decentralized lending services. At the end of 2025, the Protocol held 61.5% of the active credit market share and more than half of the total credit sector value (TVL), as stated in their annual review. Furthermore, the Horizon platform, created together with VanEck, Circle and Securitize, became one of the largest institutional marketplaces for real-world asset (RWA) lending in DeFi. That’s why Aave has already started working on the mass adoption of tokenized finance.
The main obstacle is not technical capacity, but adoption.
Securities finance is already one of the most sophisticated areas in traditional markets. Every day, trillions of dollars flow through repurchase agreements and securities lending systems, which are built on decades of regulatory frameworks and increasingly automated infrastructure.
To move these activities to blockchains, the technology would need to offer clear, practical benefits. That could mean cheaper financing, faster settlement, smoother movement of collateral or better access to liquidity in the different markets.
Aave V4 is interesting in this context. Its structure separates pooled liquidity from more specialized lending environments, similar to the way large financial institutions already organize risk internally. Rather than trying to rebuild securities financing from scratch, it effectively mirrors the way the system already works – it simply runs it on public blockchain infrastructure.
The potential is enormous, but so are the obstacles. Institutions must address the challenge of smart contract risk, governance and regulatory issues, and the operational challenges of handling tokenized collateral at scale. Aave’s focus on creating segregated liquidity hubs and improved risk management also shows how even their project is as dependent on trust and regulation as the technical solution.
This means that Kulechov’s plan is not just a new product roadmap for Aave. It’s an experiment that will determine whether public blockchains can ultimately provide solutions similar to the ones Wall Street has been building for decades. If they succeed, Aave V4 could become a basic lending protocol for tokenized assets. Otherwise, they can still capture significant market share in the crypto and RWA markets.