Aave Founder Stani Kulechov: V4 Will Become the Backbone of All Finance
Aave founder Stani Kulechov stated that Aave V4 will become the backbone of all finance through a Hub and Spoke architecture, supporting the processing of trillions of dollars in assets and providing unified liquidity for institutions and fintechs.
The Hub refers to a single cross-chain unified liquidity pool, serving as the center for all assets; the Spoke is a highly customizable market that can access Hub liquidity and set independent risk parameters and liquidation rules for different assets. Kulechov claims this will make Aave the preferred choice for any institution, fintech, or company seeking deep and reliable liquidity.
Currently, the total supply of the protocol is approximately $31.27 billion, with loans around $12.33 billion and a TVL of about $18.94 billion, where V3 accounts for 96.3%. V4 has been deployed on multiple networks with deposits exceeding $1 billion and active loans in the hundreds of millions. The Horizon RWA market has net deposits of about $550 million, aiming to rapidly expand to over $1 billion by 2026, with partners including Circle, Ripple, Franklin Templeton, and VanEck.
DAO Snapshot voting nearly unanimously supports the launch of V4 on the Ethereum mainnet. Citi Research positions Aave as a collateral liquidity protocol for tokenized capital markets, capable of handling the movement of trillions of dollars in traditional finance. The protocol has supported Coinbase's tokenized stocks as collateral for loans and is expanding across networks such as Arc, Avalanche, and Base.
In 2025, the protocol's cumulative deposits once surpassed $3.3 trillion, with loans nearing $1 trillion, and fees for that year were about $885 million, capturing around 60% of the DeFi lending market share. V4's revenue is still in its early stages, but the architectural design aims to gradually expand TVL through modular markets and attract more RWA and institutional funds.
Institutions and fintechs are buying or accessing Aave liquidity to obtain 24/7 credit and collateral liquidity, driven by the V4 architecture upgrade and the growth of tokenized assets; funds are flowing from traditional banks and fragmented DeFi pools into the unified Hub, benefiting the Aave protocol and DAO from increased fees and TVL, while traditional intermediaries and fragmented liquidity platforms face pressure.
Source: Public Information
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Stani Kulechov started in 2017 with ETHLend, facilitating lending through smart contracts, which later evolved into Aave with the introduction of flash loans, making the protocol a composable infrastructure; historically, it has processed trillions of dollars in cumulative flow and held a dominant share in DeFi lending, but has also experienced significant TVL drawdowns and DAO fee distribution controversies.
The capital path focuses on the unified Hub absorbing cross-chain and institutional liquidity, then outputting to RWA, tokenized stocks, and customized markets through Spoke; partners like Circle and Franklin Templeton are bringing traditional assets on-chain, with Horizon aiming to expand from $550 million to $1 billion, while DAO buybacks and all revenue flow to AAVE, forming a closed loop from deposits to fees to token value.
This is similar to Compound's early decentralized lending path, but Aave's Hub-Spoke and RWA expansion is closer to the unified ledger model of traditional banking systems; it is currently transitioning from a crypto-native dominance to an expansion phase involving institutions and tokenized assets, with the V4 mainnet advancement and Citi's endorsement indicating an attempt to shift from DeFi's forefront to a broader credit layer.
Essentially, this represents a restructuring of the industry chain: the collateral and credit intermediaries of traditional finance are being replaced by an on-chain unified liquidity layer, with pricing power shifting from decentralized banks and brokers to verifiable protocol parameters and DAO governance; once liquidity is centralized in the Hub, Spoke can quickly customize markets, reducing fragmentation costs and allowing more assets to maintain productivity on-chain.
ABAB News · Cognitive Law
- Unified liquidity equals concentrated pricing power
- Backbone equals a composable credit layer
- From crypto pools to institutional backbone, scale determines voice.