Aave is not only significant for DeFi; it stands as the largest lending protocol in the sector, boasting over $50 billion in assets across its markets. This positions its balance sheet among the top 50 U.S. banks by assets if it were a conventional institution.
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Stani Kulechov, Aave’s founder and developer at Aave Labs, describes the vision succinctly: “Aave will serve as the backbone of all credit,” he stated. This encompasses more than just leverage for crypto traders; it includes mortgages, credit cards, consumer and business loans, and even sovereign debt, with DeFi operating subtly in the background.
The journey consists of two tracks. On the consumer front, the upcoming Aave App, now available on Apple’s App Store, aims to function as a savings account for average investors. Users will encounter an interface resembling a neobank; behind the scenes, deposits are directed into Aave’s on-chain lending markets—a classic “DeFi mullet” approach where a familiar Web2 front end conceals the intricate blockchain and DeFi system operating in the back end.
Then there’s the institutional aspect and the thriving tokenized real-world asset market. Aave’s Horizon, launched in August, provides regulated entities a marketplace to borrow stablecoins against their tokenized assets around the clock while adhering to compliance regulations. It has expanded into a pool of approximately $600 million, despite recent challenges in the crypto landscape.
With the global shift towards on-chain operations and the growing integration of traditional finance with blockchain, Aave is strategically placed in the core of this evolution.
Recently, Aave has become embroiled in a governance conflict between tokenholders within the protocol’s self-governing DAO and Stani Kulechov’s Aave Labs over control of essential revenue sources and the ownership of vital project assets like branding, trademarks, and associated intellectual property. The debate encompasses not only the protocol’s on-chain parameters but also the surrounding authority.
The implications of this dispute extend well beyond Aave itself. How this situation unfolds could establish what governance tokens effectively entitle holders to, set a benchmark for protocol ownership within DeFi, and delineate the line between decentralized governance and corporate management.
