Decentralized finance (DeFi) is witnessing a resurgence, with the lending and borrowing platform Aave reaching a new all-time high in weekly active borrowers. On August 14, Aave founder Stani Kulechov shared that the platform had achieved approximately 40,000 active weekly borrowers, surpassing its previous peak from late 2022.
Layer-2 Networks Fueling Aave’s Growth
This growth in Aave’s user base has been significantly influenced by the rise of new lending markets on Layer-2 chains, particularly Base and Scroll. According to Dune Analytics, Base now accounts for nearly 30% of the total unique wallets on Aave V3, with Arbitrum and Polygon following close behind, holding wallet shares of 23.4% and 21%, respectively.
Kulechov also highlighted that the number of weekly depositors on Aave is nearing its peak levels, indicating robust activity on the platform. Earlier this month, the number of depositors saw a significant spike, further underscoring Aave’s growing popularity in the DeFi space.
Aave’s Position in the DeFi Ecosystem
Aave operates as a decentralized platform across 12 different blockchains, offering overcollateralized loans. Users can deposit cryptocurrency as collateral to borrow funds, with smart contracts automating the entire process. These contracts manage fund distribution, collateral handling, and fee assessments based on preset rules.
As of now, Aave ranks as the third-largest DeFi protocol by total value locked (TVL), with a reported $11.85 billion, according to DeFiLlama. Although this represents a 70% increase in TVL so far this year, it still remains below the platform’s peak TVL of around $20 billion, achieved in October 2021.
The Broader DeFi Landscape
The recent growth of Aave is part of a broader trend suggesting that DeFi is once again on the rise. The founder of Defiance Capital, Arthur Cheong, commented on Aave’s growth, noting the potential investment opportunities in the mismatch between growth and current valuations in the DeFi space.
DeFi active loans have returned to levels not seen since early 2022, reaching around $13.3 billion. Additionally, the total value locked across the entire DeFi ecosystem has increased by 40% this year, hitting $90 billion, though it has faced some setbacks due to recent market corrections.
