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Aave is moving onchain lending beyond crypto collateral and into the $4.6 trillion global securities lending market. Founder Stani Kulechov said the protocol is broadening its total addressable market from crypto-native assets to all asset classes through securities-backed loans and securities lending. Aave executive Luigi D'Onorio DeMeo added that Aave V4 will introduce tokenized stocks to onchain securities lending, letting lenders earn borrowing fees directly without intermediaries or rehypothecation.
Why it matters
Global securities lending currently moves roughly $35 billion in annual fee revenue through a heavily intermediated chain of prime brokers, custodians, and tri-party agents. Bringing tokenized equities onchain collapses that stack: a lender posts the tokenized share, the borrower posts collateral, and the fee splits automatically through the protocol rather than across multiple back-office counterparties. If the legal wrapper around tokenized stock collateral holds up in major jurisdictions, the model competes directly with traditional securities finance desks on margin economics, not just on throughput.
Market impact
The pivot positions Aave as the first major DeFi money market extending into the same fee pool that has historically fed large bank prime brokerage units. Competitors in the onchain RWA space will likely face pressure to match the collateral menu, and the $35 billion annual revenue figure gives Aave a TAM benchmark that goes well beyond DeFi TVL. The build-out depends on V4 shipping and on tokenized stock liquidity deepening enough to clear institutional-size borrows. Watch the first V4 audit milestone and any equity-token issuer partnerships as the next inflection points.
Frequently asked questions
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What is Aave's new target market?
Aave is expanding beyond crypto collateral into the global securities lending market, which founder Stani Kulechov sized at roughly $4.6 trillion in securities on loan and around $35 billion in annual fee revenue.
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How will Aave V4 handle tokenized stocks?
According to Aave executive Luigi D'Onorio DeMeo, V4 will introduce tokenized stocks to onchain securities lending, letting lenders earn borrowing fees directly without intermediaries or rehypothecation.
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What is rehypothecation and why does cutting it out matter?
Rehypothecation is the practice of a intermediary reusing collateral posted by a lender for its own purposes. Removing it means the posted tokenized shares stay bound to the original loan, giving lenders clearer title to their collateral.
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How much revenue is at stake in securities lending?
Aave execs cited roughly $35 billion in annual fee revenue across the global securities lending market, which is currently intermediated by prime brokers, custodians, and tri-party agents.
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What has to happen for Aave's securities lending push to work?
Two things: Aave V4 has to ship with the tokenized stock collateral module live, and the legal wrapper around tokenized equities has to be clear enough in major jurisdictions to support institutional-size borrows.
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