Aave Founder Predicts DeFi Surge with Potential Fed Rate Cuts

Lowering interest rates by central banks could boost DeFi yields, says Aave founder.

Lowering interest rates by central banks could create favourable conditions for yield growth in the DeFi sector. This was stated by Stani Kulechov, founder of the leading lending platform Aave, at the TOKEN2049 event in Singapore.

A Fresh Impetus for Decentralized Finance

Kulechov noted that each easing of monetary policy by both the Fed and the ECB opens up additional opportunities for arbitrage in DeFi.

Last month, the Fed reduced the interest rate by 25 basis points to a range of 4-4.25%. The regulator also signalled plans for two additional cuts by the end of the year.

The Aave founder recalled that the DeFi sector experienced rapid growth in 2020 when the US government eased monetary policy amid the COVID-19 pandemic. At that time, the total value locked (TVL) in decentralized protocols increased from less than $1 billion to $10 billion in just a few months.

Finance of the Future

According to the Aave founder, a reduction in interest rates combined with the development of DeFi could drive renewed interest in decentralized finance.

“We have built a truly powerful infrastructure. Now we are moving to a stage where DeFi can integrate into the broader fintech ecosystem, distributing yield,” said Kulechov.

The expert noted that with the easing of regulation in the field of tokenized assets, their significance for the development of DeFi will grow.

Aave’s Growth and Institutional Interest

In 2025, Aave demonstrated significant growth: according to the aggregator DeFi Llama, the total TVL of the protocol more than doubled — from $21 billion to $44.24 billion.

At the time of publication, Aave ranks 14th among protocols by the volume of generated fees.

“Decentralized lending can become a bridge between traditional finance and the cryptocurrency market, offering familiar concepts with enhanced transparency and global accessibility,” notes an August report by The Block.

In September 2025, the volume of active loans on Aave exceeded $30.2 billion.