Aave Teams with Plasma to Attract $1 Billion Institutional Capital into DeFi

Aave, one of the leading decentralized lending platforms, has partnered with Plasma to launch an institutional blockchain fund aimed at bringing $1 billion in institutional capital into the DeFi space [1]. This move comes after Aave recently surpassed $60 billion in total value locked (TVL), a testament to its growing influence in decentralized finance [2]. The new fund is designed to integrate traditional finance capital with Aave’s decentralized lending technology, facilitating broader adoption of DeFi among institutional investors [3].

The announcement was made on August 7, with Plasma and Aave emphasizing the fund's role in bridging traditional and decentralized finance [4]. This partnership represents a strategic shift for Aave, which has seen rapid growth in TVL and daily fees—both of which have surged by 200% in the current quarter. The Aave V4 upgrade, which includes features tailored for institutional users, has played a key role in this growth [5].

Despite recent success, Aave has also faced challenges. On July 29, the protocol experienced a phishing attack just one day after hitting the $60B TVL milestone. The incident underscores the persistent security risks in DeFi, even as the sector achieves unprecedented scale [6]. However, Aave has continued to dominate the DeFi market, capturing 31% of a $49B TVL increase earlier in July, solidifying its position as a top decentralized lending platform [7].

The partnership with Plasma arrives at a pivotal moment for DeFi, as regulatory sentiment appears to be shifting in a more favorable direction. SEC Chair Paul Atkins recently voiced support for DeFi, signaling a potential reduction in regulatory uncertainty for projects like Aave [8]. This development could encourage more institutional participation in the sector, particularly as DeFi products become increasingly sophisticated and compliant.

Technically, Aave’s token (AAVE) is currently trading at $282.84, with a market capitalization of $4.31B and a 24-hour volume of $583.3M. While the token has fallen 0.84% on the day, it has gained 8.50% over the past week and is up 187.86% year-on-year. The token has traded near the $281–$291 resistance zone, with key support levels around $241–$228 and a major base of support at $213 [9]. If bullish momentum returns, the next upside target for Aave could be the $320–$340 range [10].

The Aave token found support at $265 recently, aligning with the 50-day moving average and a key Fibonacci retracement level. The MACD indicator shows slowing downward momentum, and the RSI reading of 51.66 suggests there is room for upward movement. A break above the $315 resistance level could bring the token to $360, but recent volume has decreased by 13%, indicating the need for confirmation from future price action [11].

Aave’s ability to attract institutional capital is also supported by its growing fee revenue and ongoing governance efforts. Discussions are underway to launch a centralized lending product on Kraken’s Ink platform, which could further integrate Aave’s DeFi capabilities into a more regulated financial environment [12]. The platform’s price movement has also become increasingly correlated with Ethereum, whose market dominance has grown by 12.19% over the past 30 days [13].

---

Source:

[1] [AAVE/Tradingview](https://coinmarketcap.com/community/articles/6895f5f11214ff464aa18f72/)

[6] [AAVE/Tradingview](https://coinmarketcap.com/community/articles/6895f5f11214ff464aa118f72/)