The proposal was published on May 29 through Aave’s Temp Check governance process and asks community members to support a launch on Arc ahead of the network’s expected mainnet debut in summer 2026.

 If approved, the plan would position Aave as a core lending infrastructure provider for institutions using Circle’s stablecoin-focused ecosystem.

Aave said the proposal includes a commitment to contribute at least $2 million annually to the Aave DAO for five years. 

The contribution would total $10 million and support long-term ecosystem development. Circle chief executive Jeremy Allaire has also publicly supported the proposed integration between the two platforms.

Arc targets institutional stablecoin activity

Circle designed Arc as a public layer one blockchain focused on stablecoin liquidity and tokenized real-world assets. 

The network uses USDC to handle transaction fees and supports infrastructure aimed at regulated institutional finance. Circle previously confirmed that BlackRock, Visa, AWS, Curve, Maple, and Aave participated in Arc’s public testnet during 2025.

According to Circle, Arc has already processed more than 150 million transactions from approximately 1.5 million wallets. 

The network recently moved beyond its testnet phase as Circle increased efforts to expand stablecoin usage into settlement systems and capital markets. 

Aave views the launch as a direct opportunity to connect its lending products with institutions entering Circle’s ecosystem.

Aave’s Horizon platform already allows institutions to borrow stablecoins against tokenized assets, including US Treasury products. 

Horizon reportedly exceeded $580 million in deposits by late 2025. The DAO roadmap for 2026 also targets $1 billion in deposits through partnerships involving Ripple, Franklin Templeton, and VanEck.

Aave V4 introduces a new liquidity structure

Aave V4 introduces a Hub and Spoke liquidity system intended to improve scalability across blockchains. 

Under the design, each blockchain contains a central liquidity hub while separate spoke markets access shared liquidity using independent risk settings.

Aave believes the structure can support larger institutional trading activity more efficiently than earlier versions.

The protocol also adopts the ERC 4626 vault standard, which removes the rebasing mechanism currently used by Aave aTokens. 

The update is expected to simplify accounting, auditing, and tax reporting for institutions integrating the protocol.

Governance tensions remain active

The Arc proposal arrives while governance disagreements surrounding Aave V4 continue inside the community. 

Earlier proposals linked to the V4 rollout narrowly passed during governance voting, while some contributors criticized voting concentration and project centralization concerns. Additional V4 deployment discussions are also active on Ethereum and Avalanche, while Babylon Labs has proposed adding native Bitcoin collateral support through separate spoke markets in the future.

The post Aave V4 Eyes Institutional Expansion Through Arc Integration first appeared on Coinfea.

The transfer marked the first operational restart for rsETH bridging since the April 18 exploit that created unbacked tokens and forced a prolonged pause. 

Kelp said withdrawals would resume within 24 hours, while deposits and exchange rate updates would follow within 48 hours.

Aave Begins the Mainnet Refill Process

The first tranche reached the Ethereum mainnet adapter after Aave and Kelp DAO confirmed the transaction publicly. 

The transfer landed at block 25087631, with a network fee of 0.00004376 ETH, according to the transaction details cited in the update. 

The move starts the second phase of the recovery process, after the earlier burn of the exploiter’s rsETH on Arbitrum.

Kelp said the remaining tranches from Aave’s Recovery Guardian and its recovery safe will move into the lockbox over the next two weeks. 

The staged refill will total 117,132 rsETH, valued at about $278 million at current prices during the latest recovery phase. 

The process aims to restore backing for cross-chain circulation before normal activity resumes across supported routes.

Kelp Tightens Bridge Security After Exploit

Kelp reopened the bridge with a stricter security framework after completing a review audited by BailSec. 

The upgrade increased LayerZero verification from one attestor to four independent attestors and raised block confirmation thresholds from 42 to 64. Kelp also removed all Layer 2 to Layer 2 bridge routes to reduce exposure.

The protocol is also moving its cross-chain infrastructure from LayerZero to Chainlink’s Cross-Chain Interoperability Protocol. 

Chainalysis attributed the April 18 exploit to a remote procedure call poisoning attack linked to North Korea’s Lazarus Group subunit TraderTraitor. 

The attackers reportedly compromised downstream RPC nodes used for Unichain L2 observation and fed forged data into the bridge verification process.

Recovery Continues as Market Trust Faces Test

The recovery timeline now stands at 26 days from exploit to bridge restoration. Unlike some earlier bridge incidents, the rsETH process did not depend on attacker negotiation or new outside compensation. 

It used coordinated ecosystem funding through DeFi United, an on-chain burn, and a federal court order clearing a 30,765 ETH transfer to Aave.

Kelp still faces a confidence test after the pause. Its total value locked has fallen from about $2 billion in September 2025 to around $1.55 billion. 

The recovered 30,765 ETH, worth about $72 million, remains in an Aave-controlled wallet pending further court authorization. 

The next two weeks will show whether liquidity returns or users shift toward rival liquid restaking protocols, including Ether.fi and Renzo, that compete for restaking deposits.

The post Aave Moves First rsETH Tranche as Kelp Restarts Bridge Recovery first appeared on Coinfea.

The decision covers 30,765.67 ETH held by the Arbitrum Security Council and supports a wider plan for affected rsETH holders. 

It said more steps remain before all holders recover fully, and its lending markets continue to stabilize after withdrawals.

Arbitrum Vote Clears Frozen ETH Release

Arbitrum governance approved the release of 30,765.67 ETH that was frozen after the KelpDAO hack. The funds had remained under Arbitrum DAO control after the Security Council intercepted part of the attacker’s transactions.

Aave worked with KelpDAO, LayerZero, EtherFi, Compound, and other parties to support the recovery process. The coordinated effort aims to restore the ETH backing of rsETH and reduce losses across affected DeFi markets.

The vote received strong support, with more than 90% of participating Aave representatives backing the liquidation plan. Aave said about 1,600 addresses supported the decision, backed by roughly 190 million ARB tokens.

Aave stablecoin vaults have started normalizing their utilization and yield rates after the wave of withdrawals. | Source: AaveScan.

The approval has raised wider questions across DeFi. The freezing and release of stolen funds created debate over intervention, decentralization, and user compensation after major exploits.

KelpDAO Shifts Cross-Chain Infrastructure

KelpDAO has moved to change its cross-chain infrastructure after the exploit. The project migrated to Chainlink’s CCIP ecosystem after using LayerZero cross-chain tools.

KelpDAO had linked the earlier infrastructure to the conditions surrounding the $292 million exploit. The move signals a stronger focus on security controls after the rsETH incident affected several lending platforms.

Aave also used its own risk systems during the crisis. Some rsETH linked to the attacker was used in attempts to borrow more assets, but the protocol liquidated positions when risk levels exceeded its limits.

Even after those liquidations, Aave on Arbitrum estimated bad debt between $170 million and $230 million. Aave founder Stani Kulechov said further actions would follow to make the protocol whole and address remaining losses.

Aave Lending Markets Start Stabilizing

Aave has started to recover after an early liquidity shock. Its total value locked stabilized above $15 billion after around $10 billion in outflows.

Several major vaults have also returned toward healthier conditions. The WETH vault utilization remained above 93%, while USDT and USDC stood near 92% and 91%, respectively.

Those levels suggest the withdrawal pressure has slowed, although overall lending activity remains weaker. Lending fell 35% over the past 30 days, while stablecoin liquidity dropped 46.3%, based on Aavescan data.

However, lending rates have moved closer to normal levels. The average lending rate stood near 2.76%, while borrowing averaged 4.08%, with differences across individual vaults.

The AAVE token stabilized near $94 after the initial market reaction. Meanwhile, GHO supply stayed above $538 million, with no recent token burn reported.

The post Aave Moves to Liquidate Hacker Wallets After KelpDAO Exploit first appeared on Coinfea.

The token remains under pressure after a major exploit tied to Kelp DAO triggered asset freezes and recovery efforts. Traders now weigh technical weakness against expectations of a rebound if funds are released.

Legal Battle Over Frozen ETH Intensifies

AAVE is seeking a U.S. court order to release roughly $71 million in ETH locked on Arbitrum. The protocol argues the funds belong to users rather than a suspected North Korea-linked hacker. This dispute has slowed efforts to return assets following the exploit and has added uncertainty to the recovery process.

The case stems from an April breach involving Kelp DAO, where attackers used a bridge vulnerability to access funds. The stolen assets were later used on Aave to borrow about $230 million in ETH. Authorities and plaintiffs claim links to North Korea’s Lazarus Group, while Aave maintains that innocent users should not bear the consequences.

Aave also warned that maintaining the freeze could require a $300 million bond from plaintiffs. The protocol stated that freezing user funds blocks recovery progress and contradicts the goal of returning assets to victims.

Market Pressure and Technical Signals

AAVE remains about 37% below its 200-day moving average, reflecting a prolonged downtrend. Price action has tightened between $91 and $95, signaling a balance between buyers and sellers. Momentum indicators show limited strength, with RSI near the mid-40s and a flat MACD trend.

This consolidation phase suggests reduced downside pressure but no clear bullish breakout yet. Traders continue to monitor whether legal clarity could trigger renewed buying activity. Short-term hesitation persists, though some accumulation signals point to potential recovery patterns.

The uncertainty has created a mixed outlook. Weak momentum keeps prices contained, while historical mean reversion trends suggest room for upside if conditions improve.

DeFi Recovery Efforts and Broader Impact

The dispute is part of a wider recovery effort led by a coalition known as DeFi United. This group includes major protocols working to restore assets and stabilize affected systems after the exploit. The initiative aims to rebuild confidence across decentralized finance platforms.

The incident also highlights tensions between asset recovery and legal enforcement claims tied to international disputes. Aave argues that seizing user funds sets a harmful precedent and complicates recovery efforts. The protocol continues to push for a resolution that prioritizes returning assets to rightful owners.

Despite ongoing uncertainty, lawmakers are making progress on related crypto regulations. Recent discussions on stablecoin rules could ease broader market concerns. However, AAVE’s near-term direction remains closely tied to the outcome of the legal case and the release of frozen funds.

The post AAVE Holds Near $93 as $71M Legal Dispute Clouds Recovery Outlook first appeared on Coinfea.

The tokens, valued at $71M, were not bridged back to Ethereum for mixing days after the hack, allowing Arbitrum a window of action. The chain’s Security Council decided to freeze the funds, as large hacks are becoming a burden for DeFi protocols. The funds were moved to a new secure wallet, not accessible to the hackers, and can only be released after a new governance decision by Arbitrum’s council.

“The Arbitrum Security Council has taken emergency action to freeze the 30,766 ETH being held in the address on Arbitrum One that is connected to the KelpDAO exploit. The Security Council acted with input from law enforcement as to the exploiter’s identity, and, at all times,” Arbitrum said.

Arbitrum joins other platforms to freeze ETH

Arbitrum’s actions are one of the biggest freezes following a hack. The large losses in the past month raised the issue of freezing funds on time, despite the initial ethos of not censoring on-chain movements. Soon after the funds were frozen, the hacker started moving and mixing the remaining ETH, diminishing hopes of a recovery. The Security Council held a long discussion before deciding to act.

In previous hacks, funds were rarely frozen, even by chains with the explicit right to blacklist wallets. In this case, Arbitrum decided to act and prevent bad debt contagion by reclaiming some of the lost ETH. Arbitrum was the latest stage in a wider decision to contain the lost ETH and avoid DeFi contagion through bad debt. Aave immediately froze its two riskiest vaults to avoid more losses.

“Aave has still frozen ETH on several networks where it has native vaults. Update on rsETH incident: WETH reserves on the Ethereum Core V3 market have been unfrozen, and users can supply WETH to Ethereum Core V3 again. WETH LTV remains at 0. WETH reserves on Ethereum Prime, Arbitrum, Base, Mantle, and Linea remain frozen,” the platform said.

The latest estimate of $196M in bad debt may diminish if the protocols can intercept and freeze some of the funds. Arbitrum used a forced state transition, which did not require the address owner to sign the transaction to a new wallet. The ability to move funds from wallets raises the issue of the censorship-free nature of crypto ownership. This time, the funds were taken from the wallet of a bad actor, setting a new potential standard for reacting to hacks.

As Web3 attacks accelerated in Q1, protocols sought ways to quickly intercept funds and not rely on ad-hoc solutions. Following the hack, Arbitrum lost $300M in total value locked down to $1.7B. Aave was down to $16.52B, down from around $25B before the hack. Arbitrum DAO managed to save its own funds and prevent some of the bad debt on the L2 chain. Arbitrum may be affected heavily, as rsETH may not be fully backed on the L2 chain, but only on the Ethereum main net.

Arbitrum has managed to claw back around 25% of the stolen funds. Currently, KelpDAO and other affected parties are negotiating with Layer Zero to discover the main flaw point for the hack and a way forward to recover losses. The recent hack was more influential due to the composability of DeFi, leaving multiple protocols exposed to rsETH and destroying multiple positions based on token collateral.

The post Arbitrum halts ETH withdrawals to prevent further losses from KelpDAO first appeared on Coinfea.

The protocol added novel features and protocols to appeal to the users and enhance productivity. These changes are as Aave gears up to roll out its V4.

Aave introduces tools to unlock idle capital

In April, Aave Labs released two significant updates on March 20 to enhance capital efficiency. Among the major additions are the V4 Reinvestment Module, which is a component of its unified liquidity structure. This feature is aimed at idle money lying in the protocol.

Approximately 30% of deposits in Aave in the form of stablecoins are idle. That is approximately $6 billion of the almost $20 billion supplied. These reserves remain idle in order to meet withdrawals and emergency borrowing demand.

The new module transfers idle liquidity to the low-risk yield strategies. These are the short-term treasuries, money market instruments, and delta-neutral trades. The system is automatically adjusted in case the demand for borrowing is high.

This strategy will help to increase returns without reducing liquidity. It is also aimed at ensuring the protocol is more efficient and competitive. Aave is still striving to become a leader in decentralized finance.

New app simplifies access and recovery

In Aave, another new account system was implemented in the app. The design enables one to create an account with just an email and a password. This eliminates the use of traditional seed phrases.

Cryptography is a key that allows users to have complete control of their assets. This key is created in the user’s device. Meanwhile, there exists the smart account layer, where complicated functions are dealt with in the background.

These are gas fee management, transaction batching, and security checks. It has a system based on modular account technology to make it usable. It strives to popularize DeFi among more people.

Recovery of the account is also made easy. Passkeys enable users to access their devices that they were previously linked to. In case of the loss of all devices, there is an option to have a biometric system that restores the availability of those devices with the help of secure verification.

Valuation gap raises questions despite strong metrics

Recent statistics indicate that Aave has a disconnect between the basics and the market values. Aave boasts of more than $25 billion of assets locked. Its revenue is in excess of $75 million a year.

Comparison of Aave and WLFI’s stats, Source: @DeFi_Dad via X/Twitter

Compared to World Liberty Financial, which is constructed on Aave infrastructure, it displays less usage. It has less than $300 million total value locked and is producing considerably less revenue. Nonetheless, its token value is larger than that of Aave.

This disparity indicates that branding might have a positive market feeling as compared to performance. Political associations are one of the factors identified by some analysts. The scenario has provoked an argument among the industry observers.

Meanwhile, Aave also has internal and external problems. BGD Labs will leave the business of sustaining V3. There are also governance tensions that have followed the disbandment of one of the key initiative groups.

The protocol risk systems have also received criticism. Issues are related to its Oracle infrastructure being complex. These problems have brought about concerns about control and implementation.

Aave V3 continues to lead other DeFi protocols despite its impending upgrade. Source: Defillama

In spite of all these difficulties, Aave is still a market leader in DeFi. Its size and revenues make it one of the best in the sector. The developments taking place are indicators of a protocol that is developing under pressure and not weakening.

The post Aave pushes DeFi expansion as V4 targets idle liquidity inefficiencies first appeared on Coinfea.

After the trade, the trader was only given tokens to the value of just $36,000, and this was following a very sharp slippage in the trade. 

However, the trader did not heed the obvious warnings regarding the risks and accepted the transaction, which led to a discussion on the aspect of DeFi safety.

The trade that went wrong

The amount was swapped on AAVE, a decentralized trading platform that swaps tokens based on liquidity pools. As large trades are done, the system will slowly run out of tokens, and prices will quickly skyrocket once the liquidity pool is completely depleted. This leads to slipping, in which the end amount that would be received by the trader is way less than it could be.

This was the same problem with the $50 million order placed by the trader to purchase AAVE tokens in this instance. There were not sufficient tokens in the liquidity pool to facilitate the huge swap, and this meant that the trader only got approximately 324 AAVE tokens valued at some 36,000 at the prevailing market value. The trader accepted the trade on his or her mobile phone despite the warnings provided on the platform and incurred massive losses.

AAVE’s response and market debate

According to the founder of AAVE, Stani Kulechov, the system worked as intended, and there were evident slippage warnings before the trade. Subsequently, the CoW Swap team attested that the platform had no problems, and, after a transaction is signed and validated on the blockchain, it is impossible to reverse it.

The episode caused unease in the DeFi community as to whether trading platforms such as AAVE will permit large trades without enhanced restrictions. Some traders have proposed to put a cap on how much the trader can slip, prohibit swaps above some set amount, or provide them with multiple confirmation measures to make the user aware of the risks. Splitting big trades into smaller units has been suggested by other people to reduce the volatility of prices.

Perspectives on DeFi and safety

Some people would suggest stricter regulations; however, others believe that that is what DeFi is all about, providing the user with complete control over their money and choices. 

They warn that imposing limitations would roll back the open nature of decentralized platforms and basically turn them into traditional financial systems with middlemen.

The argument also raised the issue of the allocation of value in slip. Professionals justified that the lost money in the slippage is not lost but redistributed among the liquidity providers and arbitrage traders who are gaining out of the fluctuations in prices.

Future safety measures

Addressing the incident, Kulechov claimed that AAVE is considering how to make the platform safer. He suggested improved warning systems to display possible trade results, improved routing schemes to locate deeper liquidity, and more comprehensive analytics to be used by the user to comprehend the effects of prices. 

AAVE even promised to return approximately 600,000 USD to interests charged on the swap, but to do so meant that the initial transaction was final, as blockchain settlements are irreversible.

This event highlights the need to become more aware of the risks of decentralized finance. Although DeFi gives users control over their assets, it also gives them no safety nets that the traditional systems of finance have provided, which results in potentially irreversible losses.

The post DeFi Trader Loses $50M on AAVE Swap, Receives Only $36K first appeared on Coinfea.

The proposal will make V4 the technical base of the protocol.

Immediately, ACI founder Marc Zeller appealed the decision on grounds of tampering by Aave Labs-related addresses. 

The off-chain vote had 622,300 votes, 497,100 votes, and 64,200 votes not voting, respectively. 

Zeller asserts that getting rid of votes associated with Aave Labs makes the outcome a denial.

The proposal has now taken to the Aave Request for Final Comment phase. In this case, pre-permanent on-chain vote terms can be updated. 

Aave Labs applied up to 42.5 million stablecoins and 75,000 AAVE tokens to finance its operational expenses, previously financed by the revenue of its products.

Vote highlights governance tensions

The close call highlights the growing tension between Aave Labs and Aave Chain Initiative regarding transparency of control and funding. 

The proposal seeks tokenholders to vote in favor of the redirection of all product revenue to the DAO treasury.

The sources of revenue are Aave swaps, mobile app, Aave Card, enterprise tools, and the Horizon RWA market. 

Aave Labs would cease to fund its operations, both in product development and business, independently by remitting 100% of its revenue to the DAO.

After the vote, Aave co-founder Stani Kulechov affirmed on X that the vote that passed propels the protocol nearer to a fully token-centric one.

Governance, power, and funding concerns

Zeller also expressed the fear of Aave Labs getting governance weight due to the allocation of 75,000 AAVE tokens. 

Other users of the forums also raised questions about the risks of ACI to control the daily operations while having fewer tokens.

On February 25, Zeller released an audit that signaled ROI on historical funding of Aave Labs totaling to $86 million. 

The report credited the team with the development of V1 to initial V3.0 developments, but indicated that much growth in revenue came after the upgrading of service providers.

Aave Labs retorted with its own report highlighting a range of innovations, including liquidity pools, Flash Loans, the Safety Module, and V3 Efficiency Mode, all developed before the service-provider architecture of the DAO.

BGD labs exit and foundation proposal

BGD Labs stated that it was not renewing its participation in AaveDAO past April 1, concluding four years as the primary technical partner. 

The company mentioned centralization issues and intense marketing of V4 as some of the causes fo quiting.

The proposal will also propose the establishment of a Foundation to store Aave trademarks and intellectual property on behalf of the DAO. 

This is to alleviate the issue of exclusivity in terms of ownership by Aave Labs. Information on the organization and management of the Foundation will be presented in another proposal.

The current controversy shows how difficult it is to strike a balance between governance, transparency of funds, and control over operations in large DeFi projects. 

The Aave Labs and ACI are now under greater scrutiny with the DAO nearing completion of its funding and architectural decisions.

The post Aave Faces Governance Controversy as ACI Challenges Voting Outcome first appeared on Coinfea.

The reports claimed that this time, the whale used the Aave lending protocol to tap the value of ETH. The whale deposited 55,240 ETH on Aave, borrowing $50M USDT and another tranche of $20M in USDT. The whale used two known wallets, with one address unstaking and providing 20M USDT.

On another address, the whale holds over 70K wrapped ETH on Aave. The whale has significant exposure to ETH, despite previous episodes of shorting the token. The stablecoins were then sent to Binance in two transactions. For the OG whale, this ETH transfer is the first wallet activity in three months. In the meantime, the whale mostly held BTC positions, switching to long bets on Hyperliquid in the short term.

October 11 whale may be planning to purchase ETH at a lower price

Just after the activities of the 1011 whale, a new wallet was created, withdrawing 42K ETH from Binance. However, it remains uncertain if the wallets are in any way connected. The recent activity on Ethereum has raised speculations that the whale, identified as Garrett Jin, will use the borrowed funds to accumulate more ETH or other assets.

The whale is known as a market indicator for a potential shift in sentiment, and has so far moved in at pivotal moments. As of December 1, the whale did not hold any positions on Hyperliquid. The whale is currently holding $176M in assets, mostly in USDT and wrapped ETH on Aave. The 1011 whale was also active earlier in November. However, as of November 12, the whale closed all ETH long positions, achieving $2.85M in profit.

The whale has not shown long-term conviction on ETH, but has exploited market recoveries. The current borrowing means the whale may be prepared to buy any local lows, or a market bottom in the near term. The whale has also posted ETH for staking, showing at least a partial allocation to long-term bullish expectations from Ethereum.

The 1011 whale deposited ETH along with several other wallets, all choosing the same staking smart contract from their selected staking pool. During the latest market downturn, Aave decreased its TVL to $31B, due to the lower price of ETH. Just as the high-profile whale moved in, ETH was back in the $2,800 range, following a recent downturn.

The post Whale wallet from October 11 crash deposits ETH to Aave first appeared on Coinfea.

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.

The post Aave fingers maturing crypto lending market for overcoming 2022 DeFi chaos first appeared on Coinfea.