Aave V4 and securities financing
ChainCatcher reported that Aave founder Stani Kulechov said Aave V4 can be used to restructure the on-chain securities financing market. In his post, he described securities financing as one of Wall Street’s largest but less publicly discussed markets, with securities-backed lending already operating at a multi-trillion-dollar scale. His comments frame Aave V4 as infrastructure that can connect shared on-chain liquidity, tokenized securities and market-specific risk rules.
Kulechov cited several figures from traditional securities financing. The average daily exposure of the U.S. repo market is about $12.6 trillion, margin financing stands at $1.3 trillion, and securities-backed lending in wealth management exceeds $400 billion. He also said the securities lending market has about $4.6 trillion in assets on loan and generated a record $15 billion in revenue in 2025. These numbers form the basis for his view that securities financing can be brought into a more structured on-chain model.
Liquidity hubs and modular markets
According to Kulechov, Aave V4 uses a “liquidity hub plus modular markets” structure. Under this design, liquidity can be shared at the base layer, while separate markets can be created above it with different risk parameters, asset scopes and rules. This allows multiple types of securities financing activity to operate from a common liquidity base while keeping their own risk settings and market requirements.
He said Aave V4 can support three core securities financing use cases: securities-backed loans, repo transactions and securities lending. In securities-backed loans, tokenized securities can be used as collateral to borrow GHO or stablecoins. In repo transactions, tokenized securities can be pledged to borrow stablecoins while enabling atomic settlement. In securities lending, the tokenized securities themselves can become borrowable assets, with lending revenue flowing directly to the asset holders.
Kulechov also discussed how liquidity hubs can be organized. Aave V4 can adopt a single shared liquidity hub, or it can split liquidity into multiple hubs by asset class and risk profile. The former provides deeper liquidity, while the latter provides stronger risk isolation. In his view, the practical path begins with unified liquidity and then gradually evolves into a multi-hub structure divided by category and risk as the range of collateral types expands.