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Aave, the largest decentralized finance (DeFi) lending protocol with roughly $27 billion in total value locked, has seen its native token fall about 15% in 2026 and trade more than 80% below its May 2021 peak. Despite the price weakness, institutional interest is appearing to grow: Grayscale has filed with the U.S. Securities and Exchange Commission (SEC) to convert its Aave trust into a spot exchange-traded fund (ETF).
Stani Kulechov, founder of Aave, said decentralized finance could unlock up to $50 trillion in “abundance assets” through tokenization by 2050. He argued this could create a new category of on-chain collateral.
Data cited from RWA.xyz indicates that almost $25 billion in real-world assets has already been tokenized on-chain. Kulechov said much of that value is concentrated in established asset classes such as U.S. Treasury bonds, stocks, commodities, private credit, and real estate. He suggested the biggest long-term impact would come from tokenizing assets that generate increasing supply and productive capacity, particularly renewable energy and advanced technologies.
Kulechov estimated that solar energy alone could represent between $15 trillion and $30 trillion of the projected $50 trillion abundance asset market by mid-century. As an example, he described a $100 million solar project that could be partially financed via tokenization, enabling developers to borrow $70 million against it and redeploy that capital into additional projects.
In that model, on-chain depositors would receive exposure to scalable, diversified yield streams backed by real-world infrastructure.
Kulechov also highlighted potential capital efficiency gains from tokenized infrastructure. He contrasted tokenized assets with traditional infrastructure investments that can lock capital for decades, arguing that tokenized assets could be traded continuously. He said this could allow investors to exit positions and redeploy funds more quickly, potentially enabling the same capital to finance multiple projects over time.
He extended the concept beyond solar to include energy storage batteries, robotics, vertical farming, lab-grown food, semiconductors, and 3D printing.
Kulechov argued that abundance-backed products may offer stronger returns and improved risk characteristics compared with scarce assets. He suggested scarce assets face compressing margins and reduced profitability, while tokenized productive infrastructure could outperform by aligning capital with scalable growth sectors.
Separately from the outlook for tokenization, Grayscale Investments filed for regulatory approval to convert its existing Aave trust into a spot ETF. The company submitted a Form S-1 registration statement to the SEC describing plans to transform the trust into the Grayscale Aave Trust ETF.
If approved, the fund would list on NYSE Arca under the ticker GAVE. Grayscale said it plans to charge a 2.5% management fee, with Coinbase serving as both custodian and prime broker. The proposed structure would hold AAVE tokens directly, providing investors with direct exposure to Aave’s native asset.
Grayscale’s filing follows a broader push by asset managers seeking altcoin-focused ETFs in the U.S. The application comes after Bitwise Asset Management filed in December for the Bitwise AAVE Strategy ETF. Bitwise’s proposal would allocate up to 60% of assets directly into AAVE tokens, with the remainder invested in securities used to provide AAVE exposure through an ETF structure. Grayscale’s proposal, by contrast, would hold the token outright.
If both products are approved, they would become the first U.S.-based ETFs offering direct exposure to Aave, joining a limited set of similar offerings overseas. In Europe, 21Shares launched an Aave exchange-traded product on Nasdaq Stockholm, and Global X introduced a comparable product in Germany.
For Grayscale, the Aave filing is another step in expanding beyond its flagship Bitcoin and Ethereum offerings. Regulators will determine whether approval is granted for DeFi-focused tokens.
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