Aave CEO Criticizes TVL as Inadequate Metric for DeFi Lending Valuation

Aave founder and CEO Stani Kulechov has expressed concerns over the use of Total Value Locked (TVL) as a primary metric for valuing DeFi lending protocols. According to ChainCatcher, Kulechov argued that TVL measures net collateral rather than actual lending activity. He highlighted that by the end of 2025, Aave's supply scale is projected to be around $52 billion, with active loans at approximately $22 billion and borrowing interest flow exceeding $700 million. In contrast, SoFi's deposits are estimated at $37.5 billion, with a loan book of about $38 billion and loan income around $1.8 billion. Kulechov pointed out that in traditional finance, deposits are considered liabilities or capital costs, while loans are income-generating assets. Lenders typically evaluate based on loan books, interest income, spreads, and asset growth. However, the DeFi market tends to focus on TVL and DAO retained fees. He emphasized that Aave's lending business, under a traditional financial accounting framework, aligns more closely with a $700 million lending operation rather than a $150 million revenue protocol. Kulechov concluded that TVL is not the income foundation for lending protocols; instead, loan books and interest flows are the core metrics.