Aave Founder Maps Hub-And-Spoke Plan To Bring Securities Finance On-Chain

TLDR:

• Repo averages $12.6 trillion in daily U.S. exposures, the largest market V4 targets 
• Aave V4 uses hubs and spokes to isolate risk across asset categories and venues
• Lending agents currently keep 20-30% of revenue that could instead reach owners 
• Tokenized real-world assets are projected to reach $16 trillion in value by 2030 

Aave founder Stani Kulechov outlined a plan to bring securities finance on-chain using Aave V4. The proposal targets repo, securities-based lending, and securities lending markets.

These markets move tens of trillions of dollars through layers of intermediaries. Kulechov says Aave V4 can replace that stack with shared liquidity and transparent settlement.

Market Size And Current Structure

Securities finance covers some of the largest credit markets in traditional finance. Repo alone averages roughly $12.6 trillion in daily exposures across the United States.

Margin lending has reached a record $1.3 trillion, while wealth-management securities-based loans add more than $400 billion. Securities lending keeps about $4.6 trillion of assets on loan and generated $15 billion in revenue during 2025.

Almost none of this activity currently touches a blockchain. Kulechov described the layers sitting between borrowers and lenders, noting that “each layer of the stack takes a fee, adds a settlement delay, and obscures information.” Collateral often gets locked inside bilateral relationships with little visibility into how it moves.

Kulechov argues that onchain rails are already large enough to absorb this volume. The stablecoin market has crossed $322 billion in total supply.

Aave secures close to $23 billion in liquidity, and its native stablecoin GHO is live across the protocol. Aave Horizon, which supports real-world-asset-backed loans, has surpassed half a billion dollars in deposits.

How Aave V4 Organizes The Market

Aave V4 separates its system into liquidity hubs and spokes. A hub holds deep, shared capital, while spokes are modular venues with their own risk parameters and asset scope. This structure mirrors how securities financing already separates collateral pools from specific trading venues.

Three flows are proposed to run through this structure. Securities-backed lending lets owners post tokenized securities as collateral and borrow stablecoins or GHO without selling assets.

Repo becomes short-dated, collateralized cash borrowing against tokenized Treasuries, settled atomically rather than over one or two days.

Securities lending turns tokenized securities into borrowable assets, with fees routed directly to suppliers instead of intermediaries.

Kulechov called repo the largest opportunity in the proposal, writing that “the market that most needs clean settlement and live collateral visibility is the one V4 serves best.”

He proposed two structural options for organizing liquidity. One design uses a single shared hub for maximum depth and simplified accounting.

The other splits liquidity into multiple hubs by asset category and risk level, such as separate pools for Treasuries, credit instruments, and equities.

Roles And Settlement Changes

Under this model, traditional finance roles shift into protocol functions. Lending agents become risk managers tuning hub parameters.

Tri-party collateral managers become the protocol’s accounting and liquidation engine. Prime brokers and clearing houses become operators running permissioned venues, while custodial ledgers move onto the blockchain itself.

Settlement speed changes substantially under this structure. Securities in the United States currently settle one day after a trade, while European markets often take two days.

The recent industry shift to one-day settlement cost market participants close to $30 billion to implement, according to the proposal.

Kulechov summarized the broader shift in roles, stating that under this structure “the work survives while the rent does not.”

Lending agents currently keep roughly 20 to 30 percent of securities-lending revenue before asset owners receive any return, a share Aave V4 aims to route back to owners instead.

The proposal frames real-world asset tokenization as a growth driver for this system. Tokenized assets are projected to reach $16 trillion by 2030, expanding the pool of collateral available for onchain securities finance.

Aave Horizon’s existing deposit growth is cited as early evidence of institutional demand for this type of infrastructure.