Crypto lending platform Aave has attributed the rise in the crypto lending market to the stabilization in stablecoin borrowing rates. The platform has emerged as the clear leader in the sector, having overcome the chaos of 2022.
According to Aave Chain Initiative founder Marc Zeller, the DAO is quite comfortable, and the protocol has now become a leader in the decentralized finance (DeFi) lending market. The organization, which serves the interests of the Aave community, was launched in 2023, after the collapse of Terra (LUNA) and the FTX crash. Since its creation, Aave has improved and rebuilt its positions. According to Zelle, at one point, the community was convinced that Aave should wind down, noting that DeFi was dead. However, over time, the project has been able to improve its codebase and has become a key lending platform during the 2025 bull market.
Aave retains market dominance
According to Zeller, Aave has gone on to establish itself, based on value locked, revenue, market share, and borrowing volume. The DAO played an important role in determining the conditions of lending and available vaults, leading to the success of the platform during the last ETH bull run. Aave currently boasts a record $41.55 billion in value locked while generating $161 million in annualized revenue, of which $47 million is used for holder incentives.
Presently, Aave holds around $299.48, a figure close to its higher range. Aave is yet to revisit its records of above $698, but the token has been able to hold steady in the market, improving on its previous price during the 2024-2025 bull market. Aave now dominates all DeFi verticals, including leveraged staking, borrowing stablecoins against BTC and ETH, and yield-generating collateral carry trades.
Zeller notes that he is aware that Aave has succeeded 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.
Aave expands to selected L2 chains
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 lessons from previous liquidation issues and settled into a more mature state. According to Zeller, the Aave lending settled at 6-8% after previous rate hikes to over 16%. As of September, Aave boasts an 8.13% yield.
One of the major effects of Aave was to boost the economies of its L2 chains. In his words, Zeller claimed that 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 that 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 reported by Cryptopolitan.
