Standard Chartered has identified the growing trend of tokenization in decentralized finance as a major opportunity for Aave. According to a newly published research note from the bank, broader adoption of tokenized assets could help boost deposits on the protocol and stimulate lending activity within its ecosystem.
Expectations for easing market pressures
Geoff Kendrick, global head of digital asset research at Standard Chartered, highlighted that despite recent pressures, Aave remains the largest protocol in decentralized lending. The research note pointed to both the recent weakness in cryptocurrency prices and the KelpDAO-related event in April as factors affecting the protocol’s recent performance.
The bank stated that the $292 million KelpDAO incident contributed to lower activity on Aave during the relevant period. These developments, according to Standard Chartered, also weighed on the protocol’s lending market share.
Mini glossary: Tokenization refers to the representation of traditional assets, such as stocks, bonds, fund shares, or real estate, as digital tokens on a blockchain. The term “real-world assets” is often used to describe these types of financial instruments that originate outside blockchain networks.
Geoff Kendrick explained that the impact of low asset prices and the negative consequences of the KelpDAO incident appear to be fading. He further indicated that the bank expects digital asset prices to rise towards the end of the year.
In line with this assessment, Standard Chartered expects operating conditions for Aave to improve once again. The research note emphasized that following recent disruptions, the platform is entering a more favorable environment.
Aave’s $75 billion deposit base stands out
Standard Chartered also compared Aave’s deposit scale to that of traditional banks. Kendrick noted that as of October 2025, the protocol’s deposit base had reached approximately $75 billion. Judged solely on deposit volume, this would place Aave among the top 30 largest banks in the United States.
The bank believes this scale could be regained—and even surpassed—in the future. The report added that growing use of tokenized assets as collateral in decentralized finance could unlock new sources of liquidity.
Tokenized assets could drive new flows to Aave
The research builds on Standard Chartered’s earlier tokenization frameworks, now applied to decentralized lending. The bank sees tokenized real-world assets fueling new lending demand on on-chain platforms. In this context, Aave emerges as a leading protocol for loans backed by such assets.
Kendrick further stated that overall growth in the tokenized asset market may help decentralized finance protocols attract more deposits. Lending platforms with large liquidity pools, he noted, are especially well-positioned to benefit from this trend.
Standard Chartered previously forecast that total value locked in decentralized finance could reach $2.7 trillion by 2030, based on anticipated growth in tokenized real-world assets and crypto-native products.
The same report also discussed the implications for decentralized exchanges linked to tokenized asset markets. Kendrick cited Uniswap as a standout platform in this space, thanks to its scale, market recognition, and track record across various market cycles.
