Low interest rates will pave the way for DeFi to explode: CEO of Aave

Stani Kulechov, the founder and CEO of Aave – one of the largest DeFi lending protocols in the world – stated that low interest rates will facilitate DeFi's entry into a phase of strong growth.

"I believe that every time central banks, whether it's the Fed or the ECB, cut interest rates, it means opening up more opportunities for yield arbitrage in DeFi," Kulechov shared at the Token2049 conference in Singapore on Wednesday. "As interest rates continue to decline, we will witness a strong bullish cycle for yields in DeFi."

According to him, this will open up opportunities to access a "highly attractive" yield, providing great financial potential for investors in all regions.

Stani KulechovLast month, the U.S. Federal Reserve (Fed) lowered interest rates by an additional 25 basis points, bringing the range down to 4% – 4.25%, with a voting ratio of 11-1. The Fed also signaled that there will be two more rate cuts before the end of 2025, amid President Donald Trump's calls for further reductions in borrowing costs.

The US once maintained interest rates close to 0% in the post-COVID-19 period, facilitating the "DeFi Summer" – a time when the total value locked (TVL) in DeFi surged from under 1 billion USD to 10 billion USD in just a few months.

"We have built a great DeFi infrastructure," Kulechov said. "And now is the time for DeFi to be more deeply integrated into the traditional financial – fintech system to distribute yields."

In addition, he predicts that the (tokenized assets) will increasingly play an important role in the future of DeFi, as the regulatory framework for tokenization becomes more relaxed.

Aave has witnessed impressive growth in 2025, with TVL more than doubling, from around 21 billion USD to the current 43.4 billion USD. According to data from DefiLlama, Aave ranks 6th in fee revenue, recording over 99 million USD in the last 30 days.

"The growth of Aave runs parallel to the wave of DeFi adoption at the institutional level, as the sector has gradually transitioned from experimental technology to practical financial infrastructure," the August report stated. "This trend suggests that decentralized lending could increasingly become a bridge between traditional finance and the cryptocurrency market, providing familiar lending models but with superior transparency and global accessibility."

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