Decentralized finance protocol Aave setting new on-chain records

Decentralized finance giant aave continues to calcify its lead in the crypto borrowing and lending sector as on-chain data shows record levels of protocol activity. 

The total value of digital assets locked into Aave’s smart contracts has reached an all-time high figure of about $40 billion, making it the largest DeFi protocol in the entire crypto ecosystem.

Meanwhile, active loans have also surpassed historical levels, climbing to more than $15 billion, which makes up nearly 66% of the market, data from blockchain analytics platform Token Terminal shows. 

Total value locked is a signal of protocol growth, but the most important metric is active loans, Marc Zeller, founder of the Aave Chan Initiative, said. “It’s a precise tracking of actual economic activity generated by users of protocol and associated revenue,” Zeller told Sherwood News. 

Aave, which holds a substantial amount of ethereum, was able to reach its milestones in part from the resurgence in the price of the asset, which has jumped roughly 45% in the past seven days to trade hands around the $2,550 level, outperforming other major cryptocurrencies.

Aave and the broader on-chain lending space are examples of successful product-market fit stories where crypto lending is used as a global financial rail, Dmitriy Berenzon, a partner at early-stage crypto venture firm Archetype, told Sherwood. “These lending protocols have remained anti-fragile throughout the last bear market and are now flourishing from both the renewed interest from institutions and companies ‘connecting’ the supply side of capital to more retail and real-world use cases,” Berenzon said. 

The price of AAVE stands at over $228, more than a 3% increase in the last 24 hours and about a 35% jump in the past seven days. The token currently has a market capitalization of $3.4 billion.