Standard Chartered has suggested that Aave, one of the leading decentralized finance (DeFi) lending protocols, could regain momentum as tokenized assets see wider adoption within DeFi. According to the bank’s analysis, this trend may attract more deposits to the platform and strengthen Aave’s position in the on-chain lending market.
Recovery prospects for Aave
Geoff Kendrick, Global Head of Digital Assets Research at Standard Chartered, noted in a research memo published Wednesday that a surge in active tokenized assets within DeFi could accelerate new inflows to Aave. The protocol is recognized as one of the largest DeFi platforms, enabling users to borrow and lend cryptocurrencies by posting crypto assets as collateral.
Despite recent disruptions, Standard Chartered maintains a positive outlook for Aave, the largest DeFi lending protocol, and emphasizes that the negative impacts witnessed recently may diminish with time.
The research points out that Aave’s recent performance has been weighed down by the general decline in digital asset prices and by a cyber theft linked to KelpDAO in April. Standard Chartered says the $292 million incident exerted additional pressure on Aave, triggering outflows and contributing to a drop in its share of the lending market.
However, the bank believes these negative factors are unlikely to be permanent. Kendrick expressed confidence that the remainder of the year could bring significant gains in digital asset prices and suggested Aave may have largely moved beyond the impact of the April event.
Tokenization theme expands to lending
According to Standard Chartered’s assessment, the tokenization trend is now extending beyond decentralized trading into lending markets. The bank sees Aave as one of the key platforms where users could eventually borrow against tokenized versions of real-world assets (RWAs). In this context, RWA refers to traditional assets such as bonds, funds, real estate, or receivables that are represented on blockchain as digital tokens.
Glossary: RWA stands for real-world assets tokenized on blockchain. This allows traditional financial assets to serve as collateral or a source of liquidity in DeFi applications.
Data from the research note highlights that, by October 2025, Aave’s deposit base could reach $75 billion—a level on par with the top 30 banks by deposits in the United States. Standard Chartered projects that as tokenized assets become more prevalent as collateral and liquidity within DeFi, Aave could recapture a portion of its previous scale.
Kendrick’s analysis states that with broader adoption of tokenized assets, Aave is expected to regain part of the scale it once achieved.
Broader outlook for DeFi
In a previously published research report, Standard Chartered estimated that the total value locked in DeFi could reach $2.7 trillion by 2030. This forecast is based on the assumption that both RWAs and other crypto-native assets will increasingly migrate onto on-chain protocols.
The bank also highlighted Uniswap on the transactional side of tokenized markets. The analysis noted that Uniswap’s size, recognition, and proven activity across different market cycles could make it a central venue for tokenized asset trading.
