Aave has surpassed $ 50 billion to crypto deposits and has become the first Defi protocol to scale on medium-sized American banks.
When it comes to finance, banks have long kept the top positions for managing people’s money. Yet Aave, a decentralized financial protocol, has quietly crossed an important milestone that even some banks would be jealous of.
The blockchain-based loan protocol has surpassed Mid July $ 50 billion in net deposits and the first Defi protocol that reaches such a scale will be a sign of how digital financing possible reform money management.
To put it in perspective, possibly the deposits of AAVE compression with a number of medium -sized banks in the US, according to publicly available data from Federal Reserve. Aave is, for example, just above Bok Financial Corporation and under UMPqua Bank in total deposits, per facts of the federal statistical reserve release.
What is one
Built on the Ethereum -Blockchain, Aave is a Defi platform that allows people to borrow and borrow cryptocurrencies without needing benches or intermediaries. Think of it as a worldwide, digital credit market where anyone with internet access can earn interest on their crypto or loosens by drawing up collapsing, all done through smart contracts, which are automated, self -executive computer programs.
The word “aave” means “spirit” in Finnish, symbolizes the somewhat invisible but powerful nature of decentralized finances that works without traditional institutions. Since its foundation, Aave has focused on lending and borrowing the later of more accessible, transparent and efficient by cutting out the usual financial gatekeepers.
Kulechov launched the project in 2017 as Ethlend, a peer-to-peer loan market built on Smart Contracts from Ethereum. By 2018, the project was renamed Aave, which reflects a broader ambition to evolve into a fully open-source liquidity protocol.
Under the leadership of Kulechov, what started as a small group of blockchain enthusiasts into one of the most recognized teams in decentralized finances. Aave attracted a global network of developers, investors and users, all attracted to the mission to reform access to financial services.
That mission was driven by a clear problem: the traditional banking system often appears to be slow, expensive and out of reach for many, especially those without strong credit history or access to formal institutions. Aave wanted to offer a decentralized alternative where someone could borrow or borrow assets, without the barriers of paperwork, gatekeepers or geographical limitations.
How Aave works
By automating and borrowing the lending with the help of smart contracts, Aave removes the need for trust in intermediaries, reduces costs and increases the speed. Users deposit their crypto assets in Aave’s liquidity pools. These Polish work as major common funds from which borrowers can take loans. In exchange, money lenders earn interest paid by the borrowers. The entire process is protected by blockchain technology, which is designed to make the system transparent and difficult to manipulate.
Borrowers must set up collateral – often more than the loan value – to protect lenders against standard. This “overcollateralization” is an important safety function that aims to maintain the stability of the platform.
Aave also has his own cryptocurrency called the Aave token, which serves several purposes within the ecosystem:
- Management: Aave -Token holders can vote on proposals that decide how the protocol develops or changes, which means that users have a control in important decisions instead of a single company or group that controls everything.
- Safety module: The tokens can be switched off (locked) as a safety net. If something goes wrong, this pool helps to cover potential losses and protect the funds of deposits.
- Discounts and benefits: The use of Aave -Tokens can give users the costs or better conditions on the platform.
At the end of June 2025, Aave expanded to the APTOS blockchain and marked the first step further than Ethereum-compatible networks, which means that traders can now borrow, borrow, use and use stabile-ins such as USD Coin (USDC) and Aave (GHO) on Aptos.
Around the same time, the protocol introduced an important update for its risk management system. Aave replaced his old safety module with a new mechanism called umbrella, which uses automatically used assets such as AUSDC or GHO to cover bad debts. The new system enables users to choose which assets they want to use and offer a more flexible way to protect the platform against losses.
From the moment of the press, Aave is now live from more than a dozen different networks, including Ethereum, Polygon, Avalanche, Arbitrum, Optimism, Base, Fantom, Gnosis, Metis, BNB Chain and Scroll.
