Aave Hits Record $41.1B TVL, Rivals Top U.S. Banks

Aave, a leading decentralized lending platform, achieved a new milestone of hitting $41.1 billion in total value locked (TVL) on August 24. This record makes Aave comparable in size to some of the biggest traditional banks in the United States. This signals a growing overlap between decentralized finance (DeFi) and the traditional financial system.

Aave Climbs U.S. Bank Rankings

According to the Federal Reserve’s recent data, Aave’s deposit base would position it as the 54th largest commercial U.S. bank. 

It surpasses Prosperity Bank’s $38.4 billion and falls just $300 million short of Bank OZK. Out of 2,156 commercial banks in the U.S., Aave’s position puts it in the top 2.5%. This is remarkable considering it is a decentralized protocol and not a traditional bank.

The protocol’s growth is not limited to deposits. Data from DefiLlama shows that Aave held $28.9 billion in active loans as of August 24. Adding this to the deposits results raises its combined figure to $71.1 billion. This would elevate Aave to the scale of the 37th largest U.S. bank in America, a ranking within the top 1.7% of the sector.

This report comes shortly after Aave launched on the Aptos blockchain, its first deployment on a non-EVM (Ethereum Virtual Machine) network. 

The Dominance in the DeFi Lending Market

Aave has established itself as the market leader in the decentralized lending sector. Aave now controls almost half of the entire DeFi lending market, which is valued at $81.5 billion. 

Its closest competitor, Morpho, manages nearly $7 billion, making Aave almost six times bigger. This dominance shows that the protocol has become the main backbone of decentralized lending markets.

Aave has also been setting new records. On August 13, it reported $29.1 billion in active loans, the highest so far. Just two days later, on August 15, it crossed $3 trillion in total deposits processed since launch. These numbers highlight Aave’s steady growth and strong demand in the lending space.

Token Sees Growth and Institutional Use

The platform’s success is also reflected in its token, AAVE. Since April 8, the token has gained over 177%, rising from $114.05 to $316.74. At the time of writing, it trades at $331.59, up 1.98% in the last 24 hours, according to CoinMarketCap data.

Institutional and crypto firm adoption has played a major role in this rise. Nasdaq-listed company BTCS now uses Aave to earn returns on its Ethereum (ETH) holdings. Similarly, Ethena’s USDe stablecoin and related assets worth $6.4 billion are deposited on the protocol.

The size and adoption of the lending chain show that it is now used as a form of institutional-grade financial infrastructure. While it is not a traditional bank, Aave operates at a scale similar to some of the largest U.S. banks.

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