AAVE Surges 25% as Lending Protocol Shatters Records—Bankers Start Sweating
DeFi’s sleeping giant wakes up swinging. AAVE just posted a 25% price pump as its lending volumes hit all-time highs—proving yet again that code moves faster than legacy finance’s paper-shuffling bureaucracies.
The protocol now facilitates more borrowing activity than some regional banks. Who needs a loan officer when you’ve got smart contracts?
This isn’t just a rally—it’s a stress test for the old guard. While Wall Street debates ’blockchain potential,’ AAVE’s algorithmically managed pools are doing the work. No branches. No bailouts. Just relentless, transparent math.
Of course, the suits will call it reckless until they finish reverse-engineering the tech to launch their own knockoff next quarter.
AAVE peaked at a one-month high, reflecting the overall market recovery of ETH. | Source: Coingecko
The renewed interest in lending signals more confidence in the bullish trend for the crypto market and sufficient stability for Ethereum (ETH).
Based on DeFi Llama data, Aave lending locks in $24.37B in total value. Aave itself reports $37B in liquidity provided, along with $10B to $15B in loans. Aave protocol also expanded the supply of its GHO native stablecoin.
The past three months have had constant GHO mints, underscoring the protocol’s health in supporting the stablecoin. GHO now has more than 261M tokens in circulation, though only a limited role as a borrowing asset.
AAVE gets short-term boost from ETH rally
The growth of Aave lending in the past month followed the recovery of ETH to as high as $2,700. The bullish trend once again allowed whale traders to tap the value of ETH by opening up new loans.
ETH withdrawals from exchanges may turn into DeFi inflows, as in the case of a recent whale deposit to Aave.
A whale has supplied 6,053 $ETH ($15.43M) into #Aave V3 and borrowed $1M $USDT, which was later sent to #Bybit.
This whale withdrew these $ETH from #OKX 3 days ago after being dormant for 9 months.
Address: 0x629af4d796f253e10ab992a4aacfc49c3c3129bb
Data @nansen_ai pic.twitter.com/IBnfn6uvaj
— Onchain Lens (@OnchainLens) May 20, 2025
For now, Aave liquidation rates are still relatively low, as depositors remain cautious of leveraging ETH at a higher price range. Loans in DeFi remain well-collateralized, with most liquidations set up under $1,000 per ETH.
Aave lending also changed its mix of assets in 2025. The share of DAI is starting to diminish as Maker phases out the asset. In the past month, WETH was Aave’s biggest source of deposits. Aave carries 2.5M WETH, of which 2.10M were borrowed.
The protocol also started carrying Coinbase’s CBBTC as collateral, increasing deposits since the start of 2025. Currently, USDC has the biggest passive income of 3.94%, followed by WETH. Aave has allowed multiple wrapped assets and some small-scale stablecoins to participate in lending, but does not guarantee demand for all the assets.
Most of the volume and deposits have switched to Aave V3 on Ethereum, with $3B to $4.2B in daily turnover of borrow volumes. Aave serves both as a source of stablecoin liquidity, and of passive income for lenders that want to put their crypto to work.
Aave has proven antifragile, growing even during bear markets. The protocol’s vaults are also used by other lending apps, becoming the main hub of liquidity for Ethereum, Base, BNB Smart Chain and other EVM-compatible networks.
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