Standard Chartered has named Aave as a prime beneficiary of the tokenized asset wave entering decentralized finance, saying the protocol is positioned to rebuild its dominance in onchain lending as real-world assets flow into DeFi markets.
In a research note published Wednesday, Geoff Kendrick, the bank’s global head of digital assets research, said active tokenized assets in DeFi would drive more deposits into Aave, the largest DeFi lending protocol by total value locked.
“Despite recent setbacks, we are bullish on the outlook for Aave, the largest [DeFi] lending protocol,” Kendrick wrote.
Setbacks identified, recovery forecast
Standard Chartered attributed Aave’s recent underperformance to two factors: a broad decline in digital asset prices and the fallout from a $292 million cybertheft in April involving KelpDAO. The incident contributed to a decline in Aave’s lending market share as assets exited the platform.
Kendrick said both headwinds are expected to dissipate. “We think both of those negatives are poised to fade. We forecast significant upside for digital asset token prices into year-end, and we think Aave has moved beyond the April incident,” he said.
The research note highlighted the scale Aave had reached before the downturn: the protocol’s October 2025 deposit base of roughly $75 billion would have placed it alongside the 30th-largest US bank by deposits. Kendrick said Standard Chartered expects Aave to recover a portion of that scale as tokenized assets are increasingly used as collateral and liquidity sources within DeFi.
Standard Chartered extends tokenization thesis to lending
The Aave note broadens the bank’s existing tokenization thesis from decentralized trading into lending infrastructure. Standard Chartered sees Aave emerging as a venue for borrowing against tokenized real-world assets (RWAs).
In an earlier research note, the bank projected that assets locked in DeFi could reach $2.7 trillion by 2030, driven by RWAs and crypto-native assets moving through onchain protocols. Kendrick also identified Uniswap as a potential trading hub for tokenized markets, citing the decentralized exchange’s scale, brand recognition, and track record across multiple crypto market cycles.
