<\/p>\n
DefiLlama founder 0xngmi says Aave\u2019s TVL isn\u2019t being \u201cpumped\u201d by circular borrowing, arguing the platform\u2019s metrics already strip out borrowed assets and loops.<\/p>\n
<\/p>\n
DefiLlama founder 0xngmi has pushed back on claims that Aave\u2019s total value locked (TVL) is overstated because of circular borrowing strategies, insisting the data platform\u2019s methodology already excludes borrowed assets from the headline metric. Responding on X to concerns that Ethena-style collateral loops were inflating Aave\u2019s (AAVE) apparent size, 0xngmi said DefiLlama \u201cdoesn\u2019t count borrowed assets in TVL,\u201d meaning \u201ccycled lending doesn\u2019t inflate\u201d the number in its dashboards.<\/p>\n
<\/p>\n
He added that duplicate calculations tied to Ethena collateral loops on Aave had previously been removed from DefiLlama\u2019s tracking, after users flagged that some looped positions were being reflected more than once in ancillary breakdowns. On its Aave and Aave v3 methodology pages, DefiLlama states that TVL \u201ccounts the tokens locked in the contracts to be used as collateral to borrow or to earn yield\u201d and that \u201cborrowed coins are not counted towards TVL,\u201d specifically \u201cto avoid inflating the TVL through cycled lending.\u201d<\/p>\n
The clarification comes as leveraged DeFi strategies built around Aave, Ethena\u2019s USDe and restaking\u2011linked collateral have grown more complex, leading some traders to question whether raw TVL still reflects genuine, unencumbered liquidity. In a recent explainer, Aave described how Ethena\u2019s model and related \u201clooping\u201d strategies can turn \u201ca single capital base into leveraged fixed yield with extreme capital efficiency,\u201d by repeatedly borrowing against and re\u2011deploying the same collateral stack.<\/p>\n
Data compiled by DefiLlama and cited in previous crypto.news coverage shows Aave\u2019s TVL has surged by more than 45% in some periods, climbing from roughly $24 billion to about $34.9 billion as network fees rose from around $48 million in June to $65 million in July, signalling heavier borrowing demand. As of mid\u20112025, Ethena\u2019s own TVL had jumped from $1 billion to nearly $11 billion, while protocol revenue more than doubled month\u2011on\u2011month, underscoring how loop\u2011enabled yield strategies now drive a large share of DeFi activity.<\/p>\n
At the same time, Aave\u2019s native token AAVE has traded with a market capitalization of roughly $1.45 billion and a 24\u2011hour volume near $666 million, with prices fluctuating between about $89 and $94 in recent sessions. According to the Aave price page on crypto.news, the token\u2019s all\u2011time high remains $661.69, set on May 18, 2021, far above its current range as DeFi investors reassess risk in complex looping trades.<\/p>\n
In an earlier crypto.news story, on\u2011chain data showed that net deposits into Aave had crossed $60 billion, even as AAVE\u2019s price consolidated around $265, suggesting that deeper usage does not always translate into immediate token appreciation. DefiLlama\u2019s 0xngmi maintains that, despite this structural leverage and the growth of collateral loops, the platform\u2019s methodology means \u201cTVL is not artificially inflated\u201d by recycled borrowing, though he acknowledged that users still need to understand how much of that collateral ultimately underpins leveraged strategies.<\/p>\n
<\/p><\/div>\n","protected":false},"excerpt":{"rendered":"
DefiLlama founder 0xngmi says Aave\u2019s TVL isn\u2019t being \u201cpumped\u201d by circular borrowing, arguing the platform\u2019s metrics already strip out borrowed assets and loops. Summary DefiLlama\u2019s 0xngmi says Aave\u2019s TVL already…<\/p>\n","protected":false},"author":1,"featured_media":12565,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-26339","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-cryptocurrency"],"_links":{"self":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/26339","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/comments?post=26339"}],"version-history":[{"count":1,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/26339\/revisions"}],"predecessor-version":[{"id":26340,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/posts\/26339\/revisions\/26340"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media\/12565"}],"wp:attachment":[{"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/media?parent=26339"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/categories?post=26339"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/bitunikey.com\/news\/wp-json\/wp\/v2\/tags?post=26339"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}