Aave aims for piece of $4.6 trillion securities lending market

Aave sets its sights on a market that extends far beyond the crypto world. Through tokenised shares and Aave V4, the protocol wants to give users direct access to the global securities lending market, a sector that generates around $35 billion in annual revenue and is currently dominated by large brokers.

Aave is available at OKX and Bybit.

Brokers keep the lion’s share of fees

Large retail platforms and prime brokers such as Robinhood and Schwab earn a significant amount from lending out shares that clients hold in their accounts. They typically retain between 50% and 85% of the lending fees and pass only a small portion back to the actual owner of the shares.

On a global scale, approximately $4.6 trillion in securities is currently outstanding as loans, according to Aave executive Luigi D’Onorio DeMeo. That market generates roughly $35 billion annually, with brokers pocketing the majority. This is precisely the system Aave aims to disrupt.

Aave V4 cuts out the middleman

With Aave V4, users can offer tokenised shares directly on the blockchain and receive the full lending fee, without any intermediary. D’Onorio DeMeo points to several concrete advantages: real-time transparency, dynamic pricing, and no rehypothecation, the re-pledging of collateral that is common among traditional brokers.

Aave founder Stani Kulechov indicates that the protocol is deliberately expanding its total addressable market, from crypto assets to all asset classes. Securities-backed loans and securities lending represent the next step in that expansion. This makes Aave V4 not only interesting for the existing DeFi community, but also for a broader group of investors who want to achieve higher returns on their stock portfolios than traditional brokers currently offer.

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