From 0 to 1 trillion dollars, how did Aave become the absolute leader in DeFi lending

Aave has reached an important milestone. According to official disclosures, since its launch in 2020, the total amount of loans issued has approached $1 trillion. This figure not only reflects growth in scale but also demonstrates the evolution of the DeFi lending market landscape and solidifies Aave’s position as an industry leader.

The Market Position Behind the Milestone

What does a total loan issuance of $1 trillion mean? In the context of DeFi, this signifies Aave’s absolute dominance in the lending market.

According to the latest information, Aave accounts for over 60% of active loans, far surpassing other lending protocols. Active loans are generally considered a better indicator of the true value of a lending protocol compared to total value locked (TVL), as they more accurately reflect actual market demand. Additionally, Aave ranks second in the global lending market, further confirming its core position within the DeFi ecosystem.

A True Reflection of Ecosystem Activity

Recent on-chain data shows that Aave is not only large in scale but also highly active. This activity comes from multiple dimensions:

• Institutional players’ participation. Bhutan’s sovereign wealth fund Druk Holdings leverages Aave to go long ETH with a current leverage position of approximately 117,000 ETH, valued at about $459 million.
• Continuous operation by professional traders. Smart money entities like Trend Research regularly borrow USDT from Aave to purchase ETH, using cyclical lending for leverage.
• Small loans by individual users. Newly created wallet addresses are also engaging in staking and borrowing operations via Aave.

All these activities point to the same phenomenon: Aave has become a trusted lending infrastructure for institutions, traders, and individual users alike.

The Moat in the Competitive Landscape

It is worth noting that the upcoming launch of WLFI Markets, a new lending protocol, will further validate Aave’s deep moat. If new entrants cannot alter the existing lending market landscape, it will further reinforce Aave’s status as the industry standard.

Currently, Aave’s advantages include:

• A large and highly sticky user base
• Well-supported ecosystem protocols (such as Fluid, Pendle, and others operating on Aave)
• Sufficient market liquidity to support large-scale lending demands
• Proven technical stability in the market

Future Highlights

The $1 trillion in total loan issuance is a past achievement for Aave, but it also indicates that lending demand in DeFi continues to grow. Future points of focus include:

• Whether Aave can maintain its market share amid new competitors
• Whether the growth of the lending market can continue
• Whether the trend of institutional capital entering DeFi lending will accelerate

Summary

Since its launch in 2020, Aave has approached $1 trillion in total loans issued. This milestone is not only a scale achievement but also cements its position as the absolute leader in the DeFi lending market. With active loans accounting for over 60%, ranking second in the global lending market, and ongoing participation from institutional funds, market recognition and trust in Aave are well established. Although new competitors are emerging, it is not easy to shake Aave’s position. To some extent, this milestone marks a relatively stable landscape in DeFi lending, with Aave’s moat continuing to deepen.