TLDR Tech / Crypto
Rebuilding Securities Finance on Aave V4
Securities finance, covering $12.6 trillion in daily US repo exposures, $1.3 trillion in margin lending, and $4.6 trillion in securities-lending assets that generated a record $15 billion in 2025 revenue, has no meaningful onchain footprint today, with value captured instead by custodians, tri-party collateral managers, prime brokers, and clearing houses. V4's hub-and-spoke architecture, separating deep shared liquidity pools from modular markets with distinct risk parameters and asset scope, maps onto how securities financing is segmented and could replace those intermediary layers. Aave already secures roughly $23 billion in liquidity, GHO serves as a native dollar, and Aave Horizon has crossed $500 million in deposits for RWA-backed loans, giving the protocol institutional-grade infrastructure ahead of this migration. With the stablecoin market above $322 billion, V4 is a plausible settlement and collateral layer for the first credible onchain alternative to a multi-trillion-dollar market that has so far ignored DeFi rails.
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