Aave app: protocols to the mainstream?

This week Aave, one of the leading onchain borrow-and-lend protocols, launched the Aave App, a consumer savings application built on top of the Aave protocol. It is one of the clearest attempts so far to bring DeFi benefits to everyday users. The timing reflects a broader shift: with the regulation in place, stablecoins widely adopted and on/off-ramps finally seamless, nothing stands between consumers and the advantages of blockchain-based financial products.

Aave effectively mimics an onchain bank. Users deposit assets to earn interest and borrow against those assets. The key difference is that it isn’t a bank, it is an onchain marketplace matching borrowers and lenders with everything operating autonomously onchain, thereby cutting out virtually all the cost of a traditional bank. Aave has long been popular with crypto-native users, with over $3.2 trillion dollars in cumulative deposits and originating over $900 billion dollars in loans.

The Aave App brings this model to the App Store. What has historically looked like complex DeFi now appears to the user as a simple, high-yield savings account. They can move value directly from their bank account onto Aave, earn roughly 6–6.5% with real-time compounding, withdraw instantly, and even benefit from one million dollars in balance protection.

And no, this isn’t the next Icesave. Aave, as a non-custodial smart contract protocol, is not taking custody of the funds, it doesn’t lend out the saver’s deposits, it doesn’t operate a fractional-reserve balance sheet. On the contrary, the Aave savings product is overcollateralized at every moment and has transparent, on-chain solvency.

This is a strong example of what we mean when we say blockchain creates better products: cheaper, faster, fairer, always-on and available globally to anyone with a smartphone. And more secure as there is nobody to trust and everything can be verified. Aave App is a meaningful test of whether consumers are ready to adopt an onchain bank not because it is crypto, but because the product is simply better.

Also this week

• Kalshi secures $1 billion in latest funding at $11 billion valuation
• Crypto exchange Kraken raises $800 million at a $20 billion valuation
• Kraken confidentially files for US IPO after new $20 billion valuation
• Alibaba to use JPMorgan’s blockchain for tokenized dollar and euro payments
• US Senate banking chair eyes vote on crypto market bill next month
• Société Générale’s SG-FORGE issues first tokenized bond in U.S.

Relevant financial updates

• GAIB*, a company that financializes and tokenizes enterprise-grade GPUs, creating a new commodity asset class with yields backed by real AI cash flow, had its TGE and is currently trading at a $74mln FDV
• BOB*, a Bitcoin-aligned hybrid Layer 2 network that merges Bitcoin’s proof-of-work security with EVM-compatible smart contract execution, had its TGE and is currently trading at a $230mln FDV
• Kalshi*, a CFTC‑regulated financial exchange that enables users to buy and sell binary event contracts on real-world outcomes ranging from economic indicators and weather to political and sports events, has raised $1bln in a funding round with investments from Andreessen Horowitz, Paradigm, Sequoia Capital, Anthos Capital, NEO and 1 other
• Kraken, a crypto exchange that offers buying and trading services for over 200 cryptocurrencies, has raised $200mln in a Strategic funding round with investments from Citadel Securities
• Obex*, a San Francisco-based incubator for projects developing yield-generating stablecoins backed by real-world assets, such as tokenized compute credits or energy assets, has raised $37mln in a funding round with investments from Framework Ventures, LayerZero Labs and Sky Protocol
• Wizzwoods, a blockchain-based pixel game integrated with Telegram and Twitter, has raised $10mln in a Series A funding round with investments from Animoca Brands and Infinity Ventures Crypto
• Deblock, a financial services company offering IBAN accounts, debit cards, and a non-custodial cryptocurrency wallet, has raised $34.72mln in a Series A funding round with investments from Speedinvest, Headline, CommerzVentures, Triton Capital, Latitude and 2 others
• Doppel*, a company offering cybersecurity services to Web3 platforms, allowing them to detect and block media impersonations, NFT counterfeits, and digital phishing attacks, has raised $70mln in a Series C funding round with investments from Andreessen Horowitz, Bessemer Venture Partners, South Park Commons, Script Capital, 9Yards Capital and 8 others
• Numerai, a hedge fund running a crowd-sourced AI tournament to predict stock market movements, has raised $30mln in a Series C funding round with investments from Union Square Ventures, Shine Capital and Paul Tudor Jones
• HELLO Labs*, an ecosystem that produces, incubates, and distributes exclusive TV shows, games, NFTs, and live events, has raised $4.60mln in a funding round with investments from Dragonfly and Mirana Ventures

*Underlying TBV portfolio position | Prices as per 21/11

Interesting things to read

• Pantera’s managing partner Paul Veradittakit explains why privacy is essential for mainstream adoption
• Coinbase founder Brian Armstrong explains how he built the largest crypto exchange from $0 to $100 billion in 9 years on the When Shift Happens podcast