Aave Emerges as a Top Destination for Crypto Yield in Tight Market Conditions

• Aave recorded a sharp surge in user base over the past six months to hit a 13-month high in February, pushing TVL to $27 billion.
• The platform has benefitted from a dip in basis trade as future premiums collapsed and speculative demand eased.

In the past month, Aave has grabbed the headlines for all the wrong reasons, with the dispute between various leadership groups imploding and some exiting the ecosystem. However, despite these wrangles, the platform’s growth has remained unhindered, and in February, it hit its highest number of monthly active users in over a year.

Data from Token Terminal shows that in February, the platform hit 160,000 monthly active users, its highest level since January of 2025, where it set a record at 164,000 users. The number has dipped to 113,200 at press time, which accounts for 22% of DeFi lending’s 500,000 users.

While it hit a new yearly high, Aave has lost its rank as the lending protocol with the most users to Morpho, which recorded 205,000. At some point in February last year, it accounted for over 50% of all DeFi lending users, but others like Morpho and third-placed Fluid have recorded accelerated growth since.

Data from Token Terminal also shows that V3 continues to dominate. Of the 133,000 users, only 500 were using the platform’s previous version, V2.

DeFiLlama data shows that Aave holds $26.84 billion in total value locked. While this amount has remained steady over the past month, it’s nearly a 50% drop from the all-time high set at the height of the bull market last October at $45 billion.

Aave Benefits from Basis Trade Dropoff

Analysts have attributed Aave’s latest surge in users to a steep drop in basis trade. Sean Dawson, whose firm, Derive, offers crypto options and perps, told one outlet that basis trade has “collapsed in recent months.” He pointed to sUSDe as one of the trades that were most popular but have since collapsed from average earnings of 10-30% to an average of 4%.

Basis trade is a market-neutral strategy in which traders earn their profits from the difference between the price of a crypto on the spot market and its derivatives, usually perpetuals or futures. Basis trading has been one of the main low-risk strategy for traders to park their capital and make up to 30% in profits.

However, analysts say this sector has been on the downtrend in recent months. Futures, which would trade at a sizable premium to spot prices, have dropped due to lower demand for leveraged long positions. This has forced such traders to seek other avenues to generate returns, and lending platforms have been the next best option. Aave is one of the most trusted names, leading to its recent surge.

The rise comes despite Aave’s woes. As we reported two weeks ago, BGD Labs announced its exit from the ecosystem at the end of this month. BGD was a technical team that the Aave DAO had contracted for technical and development support; it was the main team behind v3, which anchors 99% of the platform’s activity.

Just days ago, the Aave Chan Initiative (ACI) followed suit, announcing that it will wind down over the next four months. ACI had been contracted by the DAO to push the community’s interests and says it was behind strategies that today drive nearly half of all the platform’s income.

Both teams blamed their departure on Aave Labs, led by founder Stani Kulechov. In its announcement, ACI alleged that the Labs was using its tokens to influence voting in favor of proposals that benefit it directly, including the recent ‘Aave Will Win’ framework, which Kulechov allegedly used 111,000 tokens of his own money to sway the vote.