According to ChainCatcher, Aave founder Stani Kulechov said in a post that Aave V4 can be used to restructure the on-chain securities financing market. He described securities financing as one of Wall Street’s largest but less publicly discussed markets, and noted that securities-backed lending is already a business measured in the trillions of dollars. In the figures he cited, the U.S. repo market has an average daily exposure of about $12.6 trillion, margin financing stands at $1.3 trillion, and wealth-management securities-backed lending exceeds $400 billion.
Shared liquidity and modular markets in Aave V4
Kulechov also said that the securities lending market has about $4.6 trillion in assets on loan and generated a record $15 billion in revenue in 2025. Against that backdrop, he said Aave V4’s architecture can connect on-chain liquidity with different forms of securities financing. Aave V4 uses a “liquidity hub plus modular markets” structure, allowing liquidity to be shared at the base layer while separate markets at the upper layer define their own risk parameters, asset scopes and rules.
In his description, the structure does not require every asset and rule set to sit inside a single undifferentiated market. Instead, specific market segments can be configured around collateral types, borrowable assets, risk settings and participation rules, while still drawing on the capital efficiency provided by the underlying liquidity hub.
Three securities financing use cases
Kulechov said Aave V4 can support three core securities financing scenarios: securities-backed lending, repo transactions and securities lending. In securities-backed lending, tokenized securities can be used as collateral to borrow GHO or stablecoins. In repo transactions, tokenized securities can be pledged as collateral to borrow stablecoins and complete atomic settlement. In securities lending, tokenized securities themselves can become borrowable assets, with lending income flowing directly to asset holders.
On the organization of liquidity hubs, Kulechov outlined two approaches. Aave V4 can use a single shared liquidity hub, or it can split hubs by asset class and risk profile. The former provides deeper liquidity, while the latter offers stronger risk isolation. He said the realistic path could begin with unified liquidity and, as collateral types expand, gradually evolve into a multi-hub structure separated by category and risk.