Aave Founder Sees $50 Trillion Tokenization Opportunity

While Aave is the largest DeFi lending protocol with roughly $27 billion in total value locked, its native token is down about 15% in 2026 and more than 80% below its 2021 peak. Despite the price slump, institutional interest appears to be growing, as Grayscale filed with the SEC to convert its Aave trust into a spot ETF.

Aave Predicts $50T Future for Onchain Assets

Stani Kulechov, founder of the decentralized lending protocol Aave, believes decentralized finance could unlock as much as $50 trillion in so-called “abundance assets” through tokenization by 2050, which could create an entirely new category of on-chain collateral. 

According to data from RWA.xyz, almost $25 billion worth of real-world assets have already been tokenized on-chain. However, most of that value is tied to familiar asset classes like US Treasury bonds, stocks, commodities, private credit and real estate. Kulechov argues that while these scarce assets will continue to grow on-chain, the greatest long-term impact will come from tokenizing assets that generate increasing supply and productive capacity, particularly in renewable energy and advanced technologies.

X post from Stani Kulechov

In a recent post on X, Kulechov said capital markets are “hungry for new collateral” and that on-chain lending infrastructure could accelerate a broader transformation in how infrastructure and productive assets are financed. He estimates that solar energy alone could account for between $15 trillion and $30 trillion of the projected $50 trillion abundance asset market by mid-century.

As an example, he described how a $100 million solar project could be partially financed through tokenization, allowing developers to borrow $70 million against it and redeploy that capital into additional projects. In such a model, on-chain depositors would gain exposure to scalable, diversified yield streams backed by real-world infrastructure.

Kulechov also talked about the potential capital efficiency gains from tokenized infrastructure. Unlike traditional infrastructure investments, which often lock up capital for decades, tokenized assets could be traded continuously. This would allow investors to exit positions and redeploy funds into new developments more quickly. This could allow the same capital to finance multiple projects over time. He extended this vision beyond solar to include energy storage batteries, robotics, vertical farming, lab-grown food, semiconductors and 3D printing.

Additionally, he argued that abundance-backed products may ultimately offer stronger returns and better risk characteristics than scarce assets, which he suggested are facing compressing margins and reduced profitability. In his view, tokenized productive infrastructure could outperform because it aligns capital with scalable growth sectors.

Aave is currently still the largest DeFi lending protocol by total value locked, with around $27 billion deposited for borrowing and lending, according to DeFiLlama. Despite its leading position in decentralized lending, Aave’s native token struggled in the market downturn. The AAVE token dropped by about 15% so far in 2026 and is trading more than 80% below its May 2021 all-time high.

AAVE’s YTD price action (Source: CoinCodex)

Grayscale Files for Aave ETF Approval

Despite AAVE’s price performance over the past few months, crypto asset manager Grayscale Investments filed for regulatory approval to convert its existing Aave trust into a spot exchange-traded fund (ETF). The company submitted a Form S-1 registration statement to the US Securities and Exchange Commission (SEC) outlining plans to transform the trust into the Grayscale Aave Trust ETF.

If approved, the fund will list on NYSE Arca under the ticker GAVE. Grayscale said it plans to charge a 2.5% management fee, with Coinbase serving as both custodian and prime broker for the proposed ETF. The structure will hold AAVE tokens directly, offering investors straightforward exposure to the decentralized finance protocol’s native asset.

The filing places Grayscale among a growing group of asset managers looking to launch altcoin-focused ETFs in the United States. This could mean that institutional interest in diversified crypto exposure is still intact, even as digital asset prices cooled from previous highs. 

Grayscale’s application follows a similar move by Bitwise Asset Management, which filed in December to launch the Bitwise AAVE Strategy ETF. Bitwise’s proposal differs in structure, as it plans to allocate up to 60% of its assets directly into AAVE tokens, with the remaining portion invested in securities like other ETFs providing AAVE exposure. By contrast, Grayscale’s proposed fund would hold the token outright.

If approved, the two products will become the first US-based ETFs to provide direct exposure to Aave, joining a limited number of similar offerings overseas. In Europe, 21Shares previously launched an Aave exchange-traded product on the Nasdaq Stockholm, while Global X introduced a comparable product in Germany.

For Grayscale, the Aave filing is another step forward in broadening its lineup beyond flagship Bitcoin and Ethereum vehicles. For now, only time will tell if regulators will extend approval to DeFi-focused tokens.