Aave’s total value locked exceeds that of traditional banks, yet its token is still considered undervalued

Aave, a prominent protocol in decentralized finance (DeFi) lending, reached a Total Value Locked (TVL) of $41.1 billion as of August 24, 2025, ranking it within the top 50 U.S. commercial banks by deposit size title4 [ 4 ]. This amount exceeds the deposits held by financial institutions such as

and Barclays title1 [ 1 ], highlighting Aave's increasing impact as a bridge between established finance and blockchain innovations. The protocol's TVL has surged rapidly, doubling in 2025 alone to reach this remarkable level title4 [ 4 ]. By September 1, 2025, Aave's TVL remained steady at $39.2 billion, indicating resilience in capital retention despite market volatility title4 [ 4 ].

Aave stands out as the dominant force in DeFi lending, owning 62% of the market share as of September 2025 title2 [ 2 ]. This stronghold is fueled by competitive liquidity structures, expansion across multiple blockchains such as

, and strategic collaborations with organizations like Fireblocks title1 [ 1 ]. In August 2025, the protocol's outstanding loans peaked at $29 billion, underscoring persistent demand for on-chain borrowing title4 [ 4 ]. Aave’s enterprise-grade security measures and integration of real-world assets (RWAs) through its Horizon project have further enhanced its attractiveness to both individual and institutional participants title1 [ 1 ].

The platform's revenue generation, derived from 0.09% flash loan fees and liquidation proceeds, produced $91.4 million in fees and $12.8 million in revenue for August 2025 title4 [ 4 ]. Over the past three years,

has amassed more than $1 billion in fees, exceeding its closest rivals by more than five times. These figures demonstrate Aave’s ability to extract value from various income sources, with its fee income often surpassing its fully diluted valuation (FDV) as a future outlook title3 [ 3 ].

Thanks to its cross-chain expansion efforts and ongoing technological advancements, Aave has secured a leading position within the DeFi landscape. By integrating the Move programming language and expanding to ecosystems like Aptos, Aave has boosted both scalability and transaction processing speeds title1 [ 1 ]. Partnerships with groups such as

have reinforced its reputation and market standing title1 [ 1 ]. Moreover, Aave’s native stablecoin, GHO, has experienced swift adoption, with a circulating supply reaching $302 million by August 2025 title1 [ 1 ].

Although its overall performance remains robust, Aave’s native token, AAVE, was trading at a 20% discount compared to its peak price of $399.85 from December 2024, as of September 2025 title4 [ 4 ]. Experts believe this gap between the protocol’s achievements and its token’s market value might signal the token is undervalued, especially as institutional capital shifts from

to alternative cryptocurrencies title4 [ 4 ]. With its strong market position, diverse revenue, and growing ecosystem, Aave is well placed to benefit from this movement of liquidity title4 [ 4 ].

Aave’s expansion has implications that reach beyond the DeFi sector, posing a challenge to traditional banking paradigms. With a TVL on par with significant U.S. banks and a revenue structure outperforming centralized financial entities, Aave serves as a prime example of blockchain’s ability to provide higher yields and decentralized financial infrastructure title1 [ 1 ]. As the DeFi industry continues to evolve, platforms like Aave are reshaping financial services, delivering secure, scalable, and accessible alternatives to conventional institutions title1 [ 1 ].