Aave Labs has acquired the team and technologies behind Avon, a startup specialising in fixed-rate lending protocols, further expanding the decentralized finance (DeFi) platform’s offerings as the Aave network reports over $33 billion in deposits and $13 billion in active loans.
Aave aims to introduce fixed-rate lending
The acquisition, announced on November 6, covers Avon’s proprietary fixed-rate and floating-rate lending protocols, its onchain order book system, and related intellectual property. While Aave has not disclosed financial terms or a timeline for making the technology available to borrowers, the deal signals an effort to diversify its product suite.
Avon’s technology is designed to support lending markets where borrowers and lenders can set interest rates for specified periods, departing from Aave’s existing model of variable rates. Fixed-rate lending could help give borrowers certainty over financing costs, making decentralized loans more attractive to those accustomed to conventional credit markets.
Aave Labs now owns Avon’s lending protocols, onchain order book infrastructure, and additional assets. Key Avon personnel, including founder Prince Sinha and engineer Ayush Kaul, are set to join Aave’s engineering team, with former Avon business lead Omar el-Ashaal moving into business development at Aave.
An onchain order book could assist in matching lenders and borrowers at agreed rates, potentially addressing challenges around creating fixed-term credit products within decentralized systems.
The move follows recent steps by Aave to expand institutional lending, including the introduction of specialized markets that support stablecoins such as Ripple’s RLUSD and PayPal’s PYUSD.
Mini dictionary: Aave is a leading DeFi protocol that enables users to lend and borrow cryptocurrencies without intermediaries. It is recognised for its sizable liquidity pools and innovative features like flash loans and rate switching between variable and stable interest rates.
A fixed-rate product could enhance the appeal of decentralized lending for borrowers who require predictable repayment costs, especially for businesses and institutions managing long-term obligations.
Institutional momentum: Kraken’s parent buys AAVE
The expansion of Aave’s lending products coincides with activity from major institutional players. On November 5, Payward, the parent company of US-based crypto exchange Kraken, announced that its affiliated investment fund and certain clients purchased an undisclosed amount of AAVE tokens via secondary-market transactions.
Payward clarified that this was not an equity investment in Aave Labs but rather a token acquisition. The value of the transaction has not been revealed.
These developments reflect rising interest from financial institutions and fintech firms in Aave’s evolving infrastructure, aimed at supporting more sophisticated lending products.
| Metric | Value |
|---|---|
| Total deposits | $33 billion |
| Active loans | $13 billion |
| Aave V4 deposits | $1.5 billion |
With over $33 billion in deposits and $13 billion in active loans, Aave remains one of the largest decentralized lending networks. Its latest version, Aave V4, has also surpassed $1.5 billion in deposits.
Despite expansion, Aave has yet to provide a rollout schedule or details on which assets, borrowing terms, or governance processes will feature in any future fixed-rate lending products.
The absence of a deployment timetable or information about supported assets highlights the cautious approach as Aave integrates Avon’s technology and navigates changing market conditions for the AAVE token.
