Aave, the decentralized lending protocol, has recently reached an all-time high total value locked (TVL) of $41.1 billion on Aug. 24. This milestone positions Aave as the equivalent of the 54th largest US commercial bank by total deposits, based on Federal Reserve data as of Jun. 30.
If we were to compare Aave’s TVL to commercial banks, it would replace Prosperity Bank with $38.4 billion in deposits, falling just $300 million short of surpassing Bank OZK. With 2,156 commercial banks in the US, Aave’s size places it among the top 2.5% largest banks in the country.
According to DefiLlama data, including Aave’s outstanding borrows of $28.9 billion as of Aug. 24 would raise the total figure to $71.1 billion. This borrowing volume was just below the all-time high of $29.1 billion recorded on Aug. 13. The TVL increased by the borrows would position Aave among the 37th largest US commercial banks, making up a 1.7% group.
Aave founder Stani Kulechov highlighted the protocol’s significance in a social media post on Aug. 24, stating, “Aave Protocol is like the 37th-largest bank, except it isn’t a bank, but a network any financial institution can plug into to unlock non-Fed–correlated yield.”
Aave’s dominance in the lending sector is evident, with the protocol controlling approximately 50% of the DeFi lending market’s total TVL as of Aug. 24. This significant market share places Aave in a commanding position within the $81.5 billion lending sector.
The protocol’s TVL is equivalent to the combined TVL of all other money markets, showcasing its dominance. Aave is nearly 6 times larger than its closest competitor, Morpho, which holds just $7 billion in deposits.
Aave has set multiple records in the past week, including reaching $3 trillion in cumulative deposits on Aug. 15 and surpassing $29 billion in active loans on Aug. 13. The AAVE token has also seen a substantial increase in value, climbing over 177% since recording a low of $114.05 on April 8, to $316.74 as of press time.
Institutional adoption is driving Aave’s expansion, with companies like Nasdaq-listed BTCS using Aave to generate yield on Ethereum holdings. Additionally, $6.4 billion of Ethena’s USDe stablecoin and related assets are deposited on the platform.
These achievements highlight Aave’s evolution into institutional-grade financial infrastructure, capturing market share as traditional finance institutions integrate decentralized lending services into their operations. The protocol’s growth and success in the DeFi space signify its importance and potential for further expansion.