Aave lending and borrowing volume surpasses $1 trillion. Is the AAVE price of $117 undervalued?

On February 26, it was announced that the decentralized lending protocol Aave’s total lending volume has officially surpassed $1 trillion, making it the first DeFi platform to reach this scale. Stani Kulechov, CEO of Aave Labs, confirmed this milestone on social media. Since its inception as ETHLend in 2017 and its rebranding in 2018, the protocol has continued to expand and is now the largest decentralized lending network by total value locked (TVL).

(Source: DefiLlama)

Data shows that Aave’s current TVL is approximately $27.2 billion, significantly ahead of competitors like Morpho, JustLend, SparkLend, and Compound Finance. Over the past 30 days, protocol fee income reached $83.3 million, nearly four times that of its closest rival, reflecting its dominant position in the on-chain lending market.

Institutional adoption has become a key growth factor. Earlier in 2026, Aave Labs launched Aave Horizon, targeting traditional financial institutions, supporting borrowing stablecoins against real-world assets as collateral. VanEck, WisdomTree, and Securitize were among the first to participate, indicating that DeFi infrastructure is extending into institutional capital. Kulechov also mentioned the potential of asset tokenization, projecting that by 2050, the scale of “wealth assets,” including energy and robotics, could reach hundreds of trillions of dollars, providing a long-term narrative for protocol expansion.

However, community governance has seen disagreements. A DAO proposal suggests providing up to $42.5 million in stablecoins and 75,000 AAVE tokens to Aave Labs in exchange for revenue backflow to the brand’s treasury. Discussions around financial control and decentralization principles are ongoing.

In terms of price performance, AAVE is currently around $117, down over 40% in the past year. Its market cap is about $1.8 billion, with a market cap-to-TVL ratio below 0.1. Some analysts believe this valuation level is attractive compared to historical cycles, but it still depends on protocol revenue growth and DeFi market activity. Whether AAVE can benefit from expanding lending volumes and institutionalization will be an important indicator to watch in the decentralized finance sector by 2026.