Tokenized stocks are starting to generate another source of potential borrowing demand for Aave. Coinbase-issued stock token deposits on Aave V4 Base crossed $10 million, up 514% in 30 days. Eligible holders can borrow USDC without selling their stock exposure, though they face liquidation risk. x.com 

AAVE looks like a DeFi blue chip at a basement price. It is the top DeFi lending protocol with more than $13 billion in total value locked and real revenue every day, yet at $76 it trades about 80% below its all-time high. x.com 

AAVE is under pressure as holders send tokens to exchanges, which usually signals selling. A $292M exploit left about $200M of bad debt, and roughly $6.6B has since left the platform. Aave is still a big DeFi project, but it is not in a good spot right now. x.com 

Aave is one of a handful of tokens likely to attract traditional allocators such as tech hedge funds, wealthy individuals and family offices, given its fundamentals, longevity and addressable market. Per Aave founder Stani Kulechov, Coinbase tokenized stocks are now live on Aave V4 on Base, letting users borrow USDC against them as Aave aims to bring the $200 trillion global equities market onchain. x.com 

Aave looks set to reverse higher now that Morpho's $175M fundraising, which drew buying toward its rival, is done, while Aave was oversold to about 7x earnings, very low for DeFi's most dominant protocol. Morpho's raise was co-led by Paradigm, a16z crypto and Ribbit Capital. x.com 

Lending tokens fall short of the sector's strong economics because team conduct and uneven holder returns undermine them. Lending capital is sticky and protocols have pricing power, but Aave rugged its DAO and Compound rugged. Morpho signaled no interest in buybacks; Kamino is silent. Maple's buybacks are small, about a tenth of revenue, and inconsistent. Spark buys back about half its revenue, but revenue is very inconsistent. The sector is great; these projects are not. x.com 

Aave stands to benefit if the SEC grants a rumored tokenization exemption, since the TAM for DeFi assets with cash flows and long-term teams would become the whole of finance. The rumored relief would let tokenized securities trade with only a transfer agent, with no broker-dealer license or exchange rules for U.S. retail and foreign investors, which would be massive for onchain finance. Aave founder Stani isn't playing around, and some charts will go bananas if it drops. x.com 

Bank coverage could help traditional finance underwrite DeFi and eventually allocate capital to it. Citi published a 24-page report on Aave, while Standard Chartered began covering Uniswap, Aave and Sky, even though banks do not make money covering DeFi as they do stocks. Analysts are learning DeFi in their own language as its businesses and tokens meet traditional-finance standards, an extremely bullish development for the space. x.com 

Aave's protocol fees do not reach token holders because Labs controls DAO governance and votes itself grants. Labs voted itself $25 million for operations and $17.5 million in performance incentives, including $5 million for launching an app. Buybacks were paused after the rsETH bridge exploit and have not resumed. Despite the protocol's quality, the Aave token is uninvestable and will keep grinding lower; unlike buyback-funded peers, holders get no direct value. x.com  x.com  x.com  x.com  x.com  … Show more

Tokenization and demand for real economics make DeFi lending, spot and yield tokens extremely appealing on risk-reward. This unrivaled trend will grow DeFi value 50x or more over multiple years, and fast. The altcoin bear market is forcing better token structures: Ethena, Uniswap and Aave are improving unit economics, Chainlink to some extent. Battle-tested Pendle and Morpho, with efficient businesses and institutional ties, will re-rate hard. A DeFi Summer return is nearly certain. x.com