Aave Tops $40 Billion in Net Deposits, Morpho Surpasses $1 Billion on Base

Aave and Morpho, two major DeFi lending protocols, have both hit significant milestones this week.

Aave has surpassed $40.3 billion in net deposits across its various deployments – marking what it claims is the highest total value locked (TVL) ever recorded by a DeFi platform. “Aave’s deposits since last year have been up only,” the team wrote on X (formerly Twitter), noting that net deposits have quadrupled from $10 billion in early 2024.

The lending protocol, which primarily operates on the Ethereum blockchain, has experienced a TVL jump of roughly 50% since April – from around $27 billion to over $40 billion today – according to DeFiLlama data. Aave added that with new initiatives such as Aave V4 and Horizon by Aave Labs in the works, there’s “much more to come.”

The DeFi sector has been boosted by Ether’s outperformance over the past week, with the second-largest cryptocurrency surging 30% amid the recent rally.

Morpho, meanwhile, has reached over $1 billion in total deposits on Base, an Ethereum Layer 2 (L2) network developed by Coinbase. The update was shared in a post on X on May 8 by Paul Frambot, CEO of Morpho Labs, who noted that nearly $150 million in active loans were coming directly from Coinbase, which rolled out Bitcoin-backed loans through Morpho in January.

Since the announcement, Morpho’s Base deposits have climbed to $1.11 billion – up $4 million in the past 24 hours and $202 million over the past week, according to Blockanalytica. On Ethereum, Morpho’s net deposits are nearing $4 billion, rising by $28 million in the last day and $358 million over the week.

Morpho’s native token MORPHO currently boasts a market capitalization of $414 million and is trading at $1.57, flat on the day but up 18% over the past week, according to CoinGecko data.

These milestones not only mark Aave’s and Morpho’s rapid growth but also reflect a broader trend in DeFi, where users are increasingly migrating to L2s for lower fees and faster transaction speeds.

Mike Cahill, CEO of Douro Labs, a leading contributor to the Pyth Network, told The Defiant that Aave and Morpho hitting these targets signal that “DeFi isn’t just back – it’s evolving into institutional-grade credit infrastructure.”

“We’re seeing real capital flow into these protocols, not because of yield farming gimmicks, but because the rails are faster, the UX is improving, and the risk models are getting more robust,” Cahill explained. “For allocators looking for transparent, 24/7 lending and borrowing infrastructure, DeFi is becoming a serious alternative to legacy systems.”

DeFi Rebounds

Broader DeFi TVL got off to a rough start in 2025, erasing billions of dollars in gains following its post-election surge in December 2024. TVL across DeFi protocols climbed to $179 billion on Dec. 17, 2024 – its highest level since May 2022, but by April, it had plunged nearly 40% to $109 billion, according to DeFiLlama.

However, DeFi has since rebounded, with TVL rising 41% over the past month to reach $154 billion as of May 12, according to DeFiLlama.

Experts attributed the drop in TVL to post-election uncertainty and shifting macroeconomic regulations. Specifically, experts pointed to the Trump administration's tariff policies as one of the biggest reasons for declining activity.

“Both DeFi and traditional markets have been influenced by macroeconomic uncertainties, including geopolitical tensions and trade policies, leading to a 'risk-off' sentiment among investors,” Todd Rouff, CEO of Autonomys, told The Defiant in an interview earlier this year.