🥛 PRO | Can AAVE 5x again after its 2024 run? 📈

GM, this is Milk Road PRO – the ‘Uber Eats’ of crypto alpha. 

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The crypto market may have hit some bumps, but innovation hasn’t slowed down—especially at Aave.

As one of the leading DeFi projects, Aave has kept pushing forward, delivering major updates and developments last month.

Here’s a roundup of the latest announcements:

• A major proposal introduces a fee switch, new aTokens, and a tokenomics revamp—boosting value for token holders.

• Yield-bearing stablecoins like $sUSDe and $sUSDS now exceed $11B, and Aave is launching a savings product to tap into this demand.

• RWA tokenization is booming, with $5B in tokenized treasuries. Horizon, built on Aave, unlocks institutional borrowing and drives revenue back into the ecosystem.

Combine all that with Aave’s stablecoin setting new records, and it’s clear why this is our next deep-dive candidate.

Aave’s stablecoin, $GHO, has been gaining momentum this year. Despite a sluggish market, it recently crossed 210 million in circulating supply—proof of its growing demand.

What’s really going on here, and what does it mean for Aave holders?

We’re just as eager to find out. We’re diving deep into the latest developments—and bringing you all the insights.

Here’s what we’re covering today:

• How is Aave performing right now?

• What impact will this new proposal have?

• Why is Aave launching a new savings product?

• Are institutions ready to embrace Aave?

• Will $AAVE repeat its 5x from 2024?

P.S. - We’re hosting our Monthly PRO Portfolio Update next week — scroll to the bottom for more info. 🥛 

Let’s dive right in—there’s a lot to go over!

P.P.S.: If you're not familiar with Aave, be sure to check out our first PRO report covering it— because we won’t be diving into the basics here.

First, let’s set the stage with some context.

AAVE TODAY

Let’s start with a market update on Aave—covering its market share, stablecoins growth and financials.

Most of us are familiar with Aave—it’s the #1 lending and borrowing protocol in crypto. 

• Want to earn yield on your assets? Use Aave. 

• Need to borrow stablecoins? Aave’s got you covered. 

But is it really that simple for everyone in the market when choosing where to lend or borrow? Let’s take a closer look.

Since 2024, Aave's market share has been on the rise, now hitting an impressive 67%. 

✅ Yes, people prefer Aave over many other platforms—and for good reason.

Their product is solid, but it’s not necessarily unique. So, what’s driving their dominance? 

1️⃣ A big reason for Aave’s success is the strong brand and trust it has built over the years. After all, you wouldn’t lend your money somewhere risky if it meant losing sleep at night, right?

But that’s not the only factor.

2️⃣ Aave has rapidly expanded to new blockchains, securing its dominance.

Here’s how Aave’s user base is distributed across different chains.

Aave has over 100,000 active wallets each month, spread across five major blockchains. 

But here, we’re zooming in on a smaller slice of that group: the 20–30% who actually borrow through Aave. Most users are just lending their crypto, not borrowing it.

👉 Don’t worry—we’ll explain later why borrowers are the ones to watch, and why this metric matters more than just looking at lenders.

Now, back to the chart… 

The message is pretty clear: when Base launched 1.5 years ago, they didn’t wait around. 

They moved fast to claim their spot and made sure rivals didn’t get a foothold.

And so far? That aggressive approach seems to be working.

That kind of growth doesn’t come without a price however. 

Aave is still handing out rewards to encourage specific actions—like providing $AAVE liquidity or staking $AAVE to help secure the protocol. You can see exactly how much that costs in the chart, right alongside the revenue it’s generating.

Aave is still offering incentives worth millions of dollars per month. However, the key point here is that its revenue consistently outpaces its incentive costs, keeping them in a strong financial position.

For example, in February, Aave brought in $8.5M in revenue while spending $5.9M on incentives, netting around $2.6M in profit.

And if that doesn’t seem like a sturdy enough cushion, consider this—Aave has $90M in its treasury, not even counting its $AAVE holdings, which add another $90M on top of that.

TL;DR: Aave is in a solid financial position. And if those big incentive numbers are still on your mind—don’t worry, we’ll dive into that at the end.

But before we move on, there’s one more chart worth highlighting. Aave’s own stablecoin, $GHO, has a supply that just keeps growing.

Just a year ago, there were only 40M $GHO in circulation. Today, that number has surged past 210M—a 5x increase in just one year.

But what does a stablecoin have to do with Aave’s lending and borrowing business?

They benefit a lot actually. Instead of relying on other people's money to lend out, they can just create and mint their own stablecoins. 

👉 This lets them cut out the “middleman” and keep all the interest payments for themselves — boosting their profits big time.

Now that you’re up to speed on Aave and what they’ve been doing, let’s dive into their latest announcements.