- Aave says securities finance includes $12.6T in daily repo exposures, $1.3T in margin lending and $4.6T in securities lending.
- Aave V4 could support securities-backed lending, repo and securities lending using tokenized assets and stablecoin liquidity.
- Aave outlined shared or specialized liquidity hubs for V4, with different risk settings based on collateral and asset categories.
Aave is outlining how its V4 architecture could support securities finance as more financial assets move onchain. Aave founder and CEO Stani Kulechov said V4 can support debt and tokenized stocks. The company said securities finance already handles tens of trillions of dollars annually.
Aave V4 Targets Securities Finance
According to Aave, U.S. repo averages about $12.6 trillion in daily exposures. Margin lending has reached $1.3 trillion, while securities-based loans exceed $400 billion. Separately, securities lending has about $4.6 trillion of assets on loan.
The business generated a record $15 billion in revenue during 2025. Aave said much of this activity remains outside blockchain networks. It identified custodians, lending agents, collateral managers, prime brokers and clearing houses within the existing structure.
However, Aave said V4 separates liquidity hubs from modular spokes. Hubs provide shared capital, while spokes operate with separate assets, rules and risk settings.
Three Finance Flows Move Onchain
Aave described three potential uses for the architecture. Securities-backed lending would allow tokenized securities to serve as collateral for GHO or stablecoins. The proposed structure would use asset-specific haircuts and automated liquidations.
Aave also said borrowers could retain their securities while accessing liquidity. Repo represents another use case. Tokenized securities could support short-term borrowing through stablecoin cash, while delivery-versus-payment could occur atomically.
Notably, Aave said the structure could also support securities lending. Tokenized securities would become borrowable assets, with borrowing fees directed toward suppliers.
Two Models For Liquidity Hubs
Aave outlined two possible market structures for V4. The first uses one shared liquidity hub beneath specialized spokes. The second uses several hubs divided by asset category and risk profile.
For example, Treasury collateral could use a lower-risk hub. Meanwhile, equity collateral could move through a separate hub with different parameters. Aave said this approach could separate risks while allowing spokes to connect with multiple hubs.
The company also cited existing infrastructure supporting its proposal. Aave said its protocol secures about $23 billion in liquidity, while GHO operates as its native dollar asset.
Additionally, Aave said Horizon has surpassed $500 million in total deposits for RWA-backed loans. Kulechov said V4 could support securities finance as markets move toward onchain settlement.
