Citi Research says Aave should no longer be read as only a crypto lending protocol. The 24-page note is dated Oct. 19 and written by Peter Christiansen and Aditi Balachandran. It argues that Aave could sit where collateral meets liquidity and financing in tokenized markets. Aave shared the research on X. It said Citi calls collateral mobility one of tokenization's most important use cases, with functions that move tens of trillions of dollars in traditional finance.
New @Citi research positions Aave as a collateral mobility protocol for tokenized capital markets.
— Aave (@aave) October 19, 2026
It calls collateral mobility one of tokenization’s most important use cases, with Aave able to take on functions that move tens of trillions of dollars in traditional finance. pic.twitter.com/4NqiKE5t8i
What the Citi note argues
Citi says the crypto-native framing of Aave is becoming increasingly incomplete. It names Aave V4, Horizon and GHO as parts of one direction of travel. The note says:
"We believe collateral mobility may ultimately prove to be one of tokenization's most important use cases."
Its sharper line is about sequence. Tokenization answers how assets move onchain, and Aave is attempting to answer how those assets will be financed once they get there.
Stock borrowing on Base is still small
Founder Stani Kulechov posted on Oct. 20 that Aave is already a multimillion-dollar market for borrowing against stocks. He wrote:
"As more stocks move onchain, this becomes a $200T+ opportunity."
The market in question is the Equities Hub on Aave V4 on Base, which launched Sept. 25. Eligible non-U.S. users can borrow USDC against seven Coinbase tokenized stocks. It opened with a collateral cap of roughly $29 million and a $21 million USDC borrow cap, according to Aave's risk provider LlamaRisk. Collateral factors run from 65% to 79%, set stock by stock.
The gap to Kulechov's target is wide. In June he put U.S. repo exposures at an average of $12.6 trillion a day and securities on loan globally at about $4.6 trillion. Aave Labs puts global equities above $150 trillion.
One design detail matters for borrowers. Chainlink's tokenized equity feeds publish prices from Sunday evening through Friday evening, so on weekends and U.S. market holidays the last price stays fixed. Aave itself runs around the clock.
How V4, Horizon and GHO stand today
V4 went live on Ethereum on March 30 with three hubs and eleven spokes. It reached Avalanche on July 15, its first deployment on a second chain.
Horizon is the institutional market where tokenized Treasuries and funds back stablecoin loans. Its deposits crossed $600 million by January 2026. DefiLlama data cited by Stablecoin Insider put its TVL near $255 million on Oct. 9. The two figures measure different things, but the market is clearly smaller than at its peak.
The same source puts GHO circulation at about $698.1 million on Oct. 9.
Across the protocol, DefiLlama showed $17.93 billion in total value locked on Oct. 19, down 4.1% over 30 days. Aave V3 alone stood at $16.87 billion on Oct. 20, against an all-time high of $45.44 billion on Oct. 7, 2025.
The governance questions in the background
The pasted summary notes that some community members question Aave Labs' governance and revenue decisions. The record is long.
In December, a delegate showed that swap fees from a new CoW Swap integration were flowing to an Aave Labs wallet. Marc Zeller of the Aave Chan Initiative estimated about $10 million a year was missing from the DAO.
By February, tokenholders faced a vote on a package of up to $42.5 million in stablecoins and 75,000 AAVE for Aave Labs. Zeller wrote that cumulative DAO revenue in Horizon's collector was about $216,000, while incentives since launch included roughly $4.2 million in Merkl rewards. That is his reading, and Aave Labs published its own contributions report the same day.
On April 13, governance approved the "Aave Will Win" proposal, which sends 100% of revenue from Aave-branded products to the DAO.
Roman Zaika
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