Aave (Aave), a leading non-indicator liquidity protocol, has established itself as an important player in the decentralized financial ecosystem (Defi), which checks approximately half of the market share of Defi Lending.
However, since the cryptomarkt remains euphorically in the midst of the wider bull run in 2025, various concerns arise within an Aave that can have serious consequences for the total market.
The risks behind Aave’s Defi -Dominance and Market Control
According to Detilama data, the total value of Aave (TVL) is $ 36.73 billion. This accounts for almost 50% of the total $ 75.98 billion TVL. In addition, the TVL of the protocol reached a record high last week of $ 40 billion.
This dominant position makes a ‘backbone’ of decentralized credit systems, so that users cannot borrow and borrow assets without intermediaries. Nevertheless, this central role also means that if Aave is confronted with problems, it can cause a wrinkle effect throughout the market.
But what could go wrong? A crucial care is the concentration of influence within the management of the protocol.
Earlier, Sandep, Nailwal, founder and CEO of Polygon Foundation, expressed the management structure within an Aave. He emphasized that the protocol is controlled by one person (Stani Kulechov, the founder).
Nailwal noted that Kulechov has significant control over proposals and votes, so that the platform is effectively performed based on personal preferences.
“He also threatens the remaining voters to vote according to his proposals (which I personally spoke after the Polygon proposal). This is when he already has a huge delegated voice,” he wrote.
The composition of the user base further reinforces Aave’s vulnerabilities. Data from Kaiko research indicated a shift in 2025, with large users a collateral of more than $ 100,000 with an increase of 29% in 2023 to 37%. In the meantime, small users with deposits fell from less than $ 1,000 from 15% to 12% in the past two years.
“Users with more than $ 100k in collapse grew from 29% in 2023 to 37% at the beginning of 2025, with the $ 100k – $ 1 million collateral group that rises to 26% and the $ 1 million+ group to 11%, each about four points. Over time, growth in large savers usually have the cost of smaller with smaller ones.
Aave user concentration. Source: Kaiko Research
This power concentration among high -quality participants increases the potential for liquidity shocks and protocol instability. If these users withdraw en masse or are confronted with liquidation events, the impact can reflect on interconnected Defi platforms.
Finally, overexpansion is also a considerable risk. The implementation of Aave over 16 chains has tense operational resources. Defi Ignas, a prominent analyst, emphasized on X that some of these extensions work with losses, which increases financial and technical risks.
“We have reached an L2 saturation point: Aave deployed on 16 chains, but the new implementations work with loss (Soneium, Celo, Linea, ZKSync, Scroll),” read the post.
The implications of these risks extend further than an AAR of yourself. As one of the most dominant players of Defi, any disruption, whether it results from governance mislukings, user concentration or overexpansion, can erode trust in decentralized lending and destabilizing the broader ecosystem. Tackling these challenges will therefore be crucial for Aave.
The post is at the point to crack under his own Defi force? First appeared on Beincrypto.
