Aave Founder: Aave V4 Can Reforge On-Chain Securities Lending Market, Targeting Market Size of Trillions of Dollars

BlockBeats News, June 20th, Aave founder Stani Kulechov stated that Aave V4 can be used to reconstruct the on-chain securities financing market. He mentioned that securities financing is one of Wall Street's largest yet least talked about markets. Securities-backed lending is already a multi-trillion dollar business, with the U.S. repo market having a daily average outstanding of around $12.6 trillion, margin financing reaching $1.3 trillion, wealth management securities-backed lending exceeding $400 billion, the securities lending market having around $46 trillion in lendable assets, and generating a record $15 billion in revenue by 2025.

Aave V4, through its "Liquidity Hub + Modular Market" structure, allows for shared liquidity at the base layer and segmented markets at the top layer with different risk parameters, asset ranges, and rules. Aave V4 can support three core securities financing scenarios: securities-backed lending, repo transactions, and securities lending. Tokenized securities can be used as collateral to borrow against GHO or stablecoins; repo transactions can borrow stablecoins against tokenized securities as collateral for atomic settlement; in securities lending, tokenized securities themselves can become lendable assets, with lending income flowing directly to asset holders.

Stani mentioned that Aave V4 can use a single shared liquidity hub, or split into multiple hubs based on asset categories and risks. The former provides deeper liquidity, while the latter offers stronger risk isolation. He believes that the likely path is to start with unified liquidity and then gradually evolve into a multi-hub structure based on categories and risks as the collateral types expand.