Stani Kulechov, founder and CEO of DeFi lender Aave, said that low interest rates will set grounds for DeFi to prosper.
“I think every single rate cut by a central bank, whether it’s by the Fed or ECB … is basically additional arbitrage for these DeFi yields,” Kulechov said during a discussion at Singapore’s Token2049 event on Wednesday. “As rates are gonna go down, we’re gonna see a really good bull market for DeFi yield.”
The Aave founder said this will set the stage for access to “really compelling” yield, offering a huge financial opportunity to participants regardless of region.
Last month, the U.S. Federal Reserve announced a 25 basis points interest rate cut to a range between 4% and 4.25%, by a vote of 11-1. The Fed signalled two more rate cuts by the end of 2025, with President Donald Trump pushing for further reductions in borrowing costs.
The U.S. saw near-zero interest rates in the years following 2020 as the Fed responded to COVID-19 impacts. Kulechov said this is when the first adopters of DeFi led “DeFi summer,” when its total value locked skyrocketed from under $1 billion to $10 billion in a matter of months.
“So now, we’ve built this really amazing DeFi infrastructure,” Kulechov said. “And we’re gonna go to a phase where DeFi actually can be embedded into the broader financial and fintech system and distribute yields.”
Meanwhile, Kulechov predicted that tokenized assets will play a more significant role in the future of DeFi, as regulation around tokenization loosens further in the future.
Aave has seen a significant growth in 2025, with its total value locked rising more than double, from around $21 billion to $43.4 billion today. Aave is currently ranked as the sixth largest protocol in terms of fees generated, making over $99 million in the past 30 days according to DefiLlama.
“The protocol’s growth coincides with broader institutional adoption of DeFi lending, as the sector matures from experimental technology to functional financial infrastructure,” The Block’s data team previously wrote in its August newsletter. “This trend suggests that decentralized lending may increasingly serve as a bridge between traditional finance and cryptocurrency markets, offering familiar lending concepts with enhanced transparency and global accessibility.”
© 2025 The Block. All Rights Reserved. This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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