DeFi & Crypto Lending Markets Have Not Just Survived—They’ve Thrived Post-2022 Chaos, Aave Founder Declares
DeFi's Phoenix Moment: Lending Markets Rise From The Ashes
Aave's founder drops the mic—crypto lending didn't just recover from the 2022 meltdown; it evolved into something leaner, meaner, and fundamentally stronger. No more overleveraged domino effects. No more unbacked promises. Just code-enforced lending protocols that actually work.
The I-Told-You-So Renaissance
While traditional finance still struggles with paper-based risk assessments and slow-motion settlements, DeFi protocols automated safeguards that prevent another Luna-style collapse. Smart contracts now enforce loan-to-value ratios in real-time—something Wall Street still can't manage without three intermediaries and a week-long settlement process.
Built Different, Performing Different
The numbers speak louder than skeptical regulators: total value locked in DeFi lending protocols hit new all-time highs this year, proving that transparent, algorithmic systems outperform opaque banking models—especially when banks still treat wire transfers like cutting-edge technology.
Finance's future isn't being built in marble-walled institutions; it's running on unstoppable code. And for once, the adults might actually be catching on.
Aave’s dominance is no longer threatened
According to Zeller, Aave is now well-established, based on value locked, revenue, market share, and borrowing volume. The DAO had a role in determining the conditions of lending and the available vaults, leading to success during the latest ETH bull market.
Aave carries a record $41.55B in value locked while generating $161M in annualized revenue, of which over $47M goes to holder incentives. As a result, AAVE holds around $299.48, close to its higher range. For now, AAVE has yet to revisit its records above $698, but the token has held steady and expanded during the 2024-2025 bull market.
Aave now dominates all DeFi verticals, including Leveraged staking, borrowing stablecoins against BTC and ETH, and yield-generating collateral carry trades. Zeller is aware that Aave has taken over where other projects failed, and has attempted to secure the platform against liquidations and panic.
The native token, GHO, grew to 352M, based on the positive market performance. GHO is dynamically minted and destroyed based on the ability of Aave to support the stablecoin.
Unlike other DeFi projects, Aave limits the number of assets held as collateral. The project is also careful with costs and incentives, expanding its ability to generate predictable profits and avoid threats to liquidity.
Overall, DeFi has learned its harsh lessons from previous liquidation cascades and settled into a more mature state. Zeller noted that Aave lending settled at around 6-8% after previous rate hikes to over 16%. As of September, Aave achieved an 8.13% yield.
Aave expands to selected L2 chains
One of the major effects of Aave was to boost the economies of L2 chains. Zeller recalled the 2023-2024 bear market led to L2 fatigue, where too many chains were created. Aave launched on over 26 chains, and soon became the leading DeFi protocol.
However, Zeller estimated not all L2 versions were viable. Currently, around 86.6% of Aave revenues are made from ethereum mainnet activity, with no need to bridge or take up additional transactions. Aave has estimated that around half of the deployments to L2 chains were not viable and has decided to limit its exposure to only key strategic networks.
The latest deployment was on Linea, following the chain’s token distribution. Aave managed to attract $2B in deposits to its Linea version, considering the chain more reliable. Recently, Linea also managed to secure record value locked, as Cryptopolitan reported.
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