Aave (AAVE) Sees 70% Drop in Borrowing Demand Despite $50B in Deposits
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
Source: Coinmarketcap
Updated: Dec 25 2025- Dramatic Drop in Borrowing: Since August, Aave has experienced a 70% decline in borrowing volume, which has directly contributed to a 35% year-to-date drop in the AAVE token, reflecting market concerns over future revenue.
- Liquidity vs. Demand Imbalance: Despite holding nearly $50 billion in deposits, Aave's revenue has decreased due to reduced borrowing activity, illustrating the reality that high deposits do not guarantee high earnings.
- Impact of Rate Changes: The borrowing rate for USDC fell from 7.7% to 4.5%, diminishing the attractiveness of leveraged trades and prompting large investors to withdraw funds quickly, exacerbating the decline in borrowing demand.
- Increased Market Competition: With platforms like Maple capturing more institutional borrowing, Aave faces competitive pressure and must enhance rates and incentives to attract borrowers back and restore market confidence.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
