AAVE recovered above USD 150 on October 21, rising 5.45% in 24 hours to USD 156.63 as traders assessed Citi Research’s outlook for lending against tokenized assets. The rebound followed a drop below USD 150 on October 20, when the token traded as low as USD 147.37.
Citi Sees a Role for Tokenized Collateral Lending
In an October 19 research note circulated on October 20, Citi analysts Peter Christiansen and Aditi Balachandran identified collateral mobility as a possible use for tokenization. Their analysis examined how lending platforms could let investors borrow against digital versions of bonds, funds and other financial assets without selling their holdings.
Citi’s separate June tokenization report estimated that on-chain assets could reach USD 5.5 trillion by 2030 in its base case. That projection covers securities across markets, not Aave’s lending revenue.
Aave shared the research on October 19, saying Citi viewed the protocol as infrastructure for tokenized capital markets. Founder Stani Kulechov also welcomed the assessment, writing on X: “Excellent overview of Aave from @Citi Research.”
Growth in Aave lending does not automatically create matching demand for its governance token. Citi discussed the protocol’s possible role in capital markets without forecasting a price increase for AAVE.
Also Read: Standard Chartered Launches Bitcoin and Ethereum Trading for Wealthy UAE Clients
Horizon Proposal Seeks Higher Borrowing Limits
Aave already operates Horizon, a lending market launched in August 2025 for approved institutions and other qualified users. Participants can pledge tokenized financial assets and borrow stablecoins, including USDC, RLUSD and GHO. Asset issuers control who may use their tokens as collateral.
On October 15, risk adviser LlamaRisk proposed raising the borrowing limit for JAAA collateral on Horizon from 81% to 87% of its value. It also recommended lifting the liquidation threshold from 86% to 89%. JAAA represents shares in the Janus Henderson Anemoy AAA CLO Fund, issued through Centrifuge.
LlamaRisk stated, “We propose raising the JAAA reserve-level LTV from 81% to 87%.” It cited 93 fund redemption orders worth USD 717.3 million over the preceding year. The proposed settings would allow larger loans but leave less room for collateral prices to fall before liquidation.
Lending Activity Remains Below Past Levels
Defillama records show about USD 18.2 billion in Aave total value locked as of October 21, with roughly USD 12.4 billion in active loans. Ethereum holds about 83% of that collateral. That borrowing figure remained below the USD 18 billion level seen in April, despite recovering from lower levels in subsequent months.
Aave remained the largest decentralized lending protocol by value locked, accounting for about 35% of lending-sector deposits tracked by DefiLlama. The protocol’s scale shows existing borrowing activity, although it does not establish how much additional lending tokenized securities could generate.
AAVE Price Faces USD 160 Resistance
AAVE’s 5.45% daily increase exceeded Bitcoin’s 2.11% advance in the same market snapshot. Trading volume also rose 17% to approximately USD 269 million. CoinGecko data separately show that AAVE closed October 19 near USD 149.37 and October 20 near USD 154.38, confirming the recovery after dipping below USD 150.
On October 6, AAVE reached USD 187.29 before reversing. The immediate levels are USD 150 on the downside and USD 160 overhead. Sustained trading above USD 160 could put the USD 175 area and the recent high near USD 188 back into view. However, a move below USD 150 could expose the USD 140 support region.
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