Aave Leads Crypto Lending Market, Earning $24 Million in Monthly Fees

By admin On Sep 5, 2024

Decentralized crypto platform Aave (AAVE) has emerged as the leader among the top five lending and borrowing protocols, recording over $24 million in fees over the past 30 days.

Aave enables users to create liquidity markets, allowing them to earn interest by supplying or borrowing assets.

Aave Protocol Leads in 30-day Fees

According to Token Terminal, Aave leads the lending and borrowing sector, followed by Morpho Labs, Venus, Compound Finance, and Moonwell. Michael Nadeau, founder of The DeFi Report, notes that Aave commands a 64% market share in the lending and borrowing markets.

Aave boasts 4.6 times more active loans than its nearest competitor and 6.3 times more TVL than the top two Solana lend/borrow applications combined. Active loans on Aave have surged 3.6 times since the FTX collapse, although they remain 60% below the late 2021 peak.

Over the past year, Aave generated $293 million in total fees, with the Aave DAO retaining 13.3%, or $38.9 million. DAO revenue reached its highest point in June 2024.

Aave Market Share. Source: Token Terminal

Nadeau’s research highlights that Aave has achieved on-chain profitability this cycle, with DAO revenue surpassing token incentives. This shift indicates the protocol is becoming less dependent on token incentives to attract users.

Meanwhile, Aave creator Stani Kulechov noted the quiet success of the Scroll market on Aave. This followed the deployment of Aave V3 on the Scroll mainnet, a strategic move with a potential to reshape the sector.

Blockchain Market Showing Scroll Growth. Source: Dune

For Aave, this integration is an opportunity to harness the high throughput and reduced gas fees of the Scroll, effectively augmenting the scalability and accessibility of its lending services. Moreover, Aave stands to benefit from an expanded user base, tapping into the active community that Scroll has cultivated.

Whales Interested in AAVE Amid Trump’s DeFi Venture

Amidst Aave’s positive developments, large holders have been expanding their portfolios. BeInCrypto reported that on August 21, a whale purchased over 50,000 AAVE tokens worth $6.65 million, shortly after another whale bought 11,101 tokens valued at $1.45 million. Additionally, Lookonchain revealed that two more whales acquired 16,592 AAVE tokens worth $2.2 million on Thursday.

This growing interest is fueled by Aave’s strategic integrations and Donald Trump’s DeFi initiative. Trump’s venue aims to establish a decentralized financial system using Aave’s non-custodial lending platform and Ethereum infrastructure, introducing his supporters to DeFi.

With Trump’s new AAVE-partnered protocol launch, it’s incredible to see DeFi become a centerpiece in this election. IMO, DeFi is the heart of crypto and its future,” wrote Jared Grey, a builder on Sushi Labs.

Gabriel Shapiro, legal adviser for World Liberty Financial, stated that the DeFi venture would serve as a “lightweight non-custodial feeder” into Aave, enabling users to deposit without the need for a fork.

AAVE Price Performance. Source: BeInCrypto

The news around World Liberty Financial boosted confidence in the potential for Aave’s mainstream adoption, driving speculative AAVE buying. Following the news, AAVE surged by 10%. However, BeInCrypto data shows the token has since erased most of those gains and trading at $131.47.

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