Aave Hits $30 Billion TVL Milestone – Signaling a New DeFi Cycle?

Aave Hits $30 Billion TVL

Aave's TVL of $30 billion is a major milestone, confirming the appeal of this decentralized lending protocol in the context of the recovering DeFi market. According to Coin68, this figure not only surpasses competitors such as Compound or MakerDAO, but also makes Aave the DeFi protocol with the highest TVL on Ethereum, surpassing EigenLayer (TVL decreased due to capital withdrawal after the airdrop).

Aave’s TVL growth is driven by technical improvements in V3, including Isolation Mode, High-Efficiency Mode, and cross-chain interoperability. These features optimize capital efficiency and risk management, attracting both retail and institutional investors. The $30 billion milestone is a testament to the growing confidence in DeFi, especially as Ethereum continues to be the leading platform with over 50% of the industry’s TVL.

What brought Aave to this impressive TVL milestone?

Aave V3 protocol enhancements , launched with features like Isolation Mode and cross-chain, have improved capital efficiency and interoperability with blockchains like Arbitrum, ZKsync, and BNB Chain. The expansion to Layer-2s has contributed over $2.55 billion in TVL from new markets.

Aave has partnered with major projects like Sky (formerly MakerDAO) and Trump’s World Liberty Financial, expanding its reach and attracting money from traditional investors. Grayscale’s launch of the Aave Trust also helped Aave reach out to financial institutions.

The recovery of DeFi, with the GMDEFI index increasing 31.67% in less than three weeks (from September 6 to September 28, 2024), has created momentum for inflows into Aave. Bitcoin hitting $70,000 and a Bitcoin spot ETF attracting $28 billion in March 2024 have also stimulated investment sentiment in cryptocurrencies in general.

These factors created a “perfect storm,” helping Aave reach record TVL and solidify its position in the DeFi industry.

Positives from Aave after hitting $30B TVL

For users, the $30 billion TVL means higher liquidity, allowing for low-cost, high-efficiency lending and depositing. New Layer-2 marketplaces like ZKsync and Arbitrum offer low gas fees, helping users maximize returns. Additionally, Aave V3’s innovative risk management system ensures asset security, increasing participant confidence.

For investors, TVL growth is a positive sign for the potential of the AAVE token. Traditional investment funds, such as Grayscale, are participating in Aave through the Aave Trust, adding legitimacy and attracting institutional capital. However, investors should note that a high TVL does not guarantee a corresponding increase in token price, as it depends on many other market factors.

AAVE Token Price Grows Rapidly

The TVL growth to $30 billion has had a significant impact on the AAVE token price, reflecting the market's confidence in the protocol's potential.

AAVE’s price increased by 25% immediately after TVL reached this milestone, reaching around $405 on May 20, 2025. Compared to $102.4 at the beginning of 2024, AAVE’s price has increased by more than 300% in 17 months, with a market capitalization of $4.87 billion.

However, some opinions, like from DYθR founder Hitesh, argue that AAVE's price is still undervalued compared to its true potential, based on a 35% increase in transaction fees/capitalization and a 67% increase in transaction volume/capitalization over the past 30 days.

However, AAVE price still faces volatility risks due to market sentiment and external factors, such as withdrawals from other protocols (e.g., EigenLayer). Investors should be cautious, especially in the context of increasingly fierce competition in the DeFi industry.

Is this the start of a new DeFi cycle?

Aave’s $30 billion TVL milestone is widely seen as a “swallow” signaling the return of DeFi. With the industry’s TVL reaching $100 billion when Bitcoin hit $70,000 in March 2024, Aave’s growth suggests capital is returning to DeFi protocols.

Aave is the “fuel for Ethereum’s outperformance,” reinforcing belief in a new growth cycle.

However, for the new DeFi cycle to be truly sustainable, Aave and other protocols will need to overcome challenges in security, regulation, and scalability. With plans to integrate six new blockchains by 2025, Aave is laying the foundation for a multi-chain DeFi ecosystem that could shape the future of decentralized finance.

Once again we give our opinion on potential projects in the crypto market. This is not investment advice, consider your portfolio. Disclaimer: The views expressed in this article are solely those of the author and do not represent the platform in any way. This article is not intended to be a guide to making investment decisions.

Compiled and analyzed by HCCVenture

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