The real story in @aave's May report wasn't growth, it was resilience. Following the $rsETH exploit, over $160M was committed to make affected users whole, with $AAVE contributing roughly $39M as part of the DeFi United recovery effort. The recovery effort revealed something important: when trust was tested, the protocol chose to spend capital protecting it. Let's break down what that means going forward. — ● The Real Story Behind May's Financials At first glance, the numbers look weak, with $44.6M in expenses against $6M in revenue and net income falling to -$38.6M. The headline loss was largely driven by a one-time ~$39M contribution to the recovery effort rather than weakness in the protocol itself. • Revenue: $6M • Expenses: $44.6M • Net Income: -$38.6M • Recovery contribution: ~$39M • Protocol revenue: $4.78M • $GHO revenue: $1.1M • Treasury revenue: $112K Excluding the recovery contribution, the protocol generated roughly $6M in revenue against $5.4M in recurring expenses, remaining profitable despite one of the largest ecosystem incidents of the year. — ● Borrowing Demand Matters More Than TVL TVL often gets the most attention, but deposits alone do not tell us how much economic activity is happening inside a lending protocol. Active loans are a stronger signal because they reflect real demand for leverage, liquidity, and capital efficiency across DeFi. • Total deposits: $26B • Active loans: $11B • Lending market share: 60.7% Borrowers continued using the protocol despite the rsETH incident and broader market uncertainty, suggesting its position as DeFi's dominant money market remained intact. — ● V4 Is Becoming The Fastest-Growing Market While most attention remains on established lending markets, V4 was one of the strongest growth stories during May. The significance is not its size today, but the pace at which capital and borrowing activity are beginning to concentrate around it. • V4 deposits: $42M → $119M ( 182% MoM) • V4 active loans: $16M → $33M • @ethereum Core: $105M • Ethereum Prime: $13M • Ethereum Plus: $264K V4 remains small relative to the broader ecosystem, but adoption is accelerating far faster than the mature protocol. — ● User Growth Validates The Trend Capital inflows alone can be misleading, especially when growth is driven by a small number of large holders. What stands out is that user activity expanded alongside capital growth. • Active users: 116K • Active depositors: 106K • Active borrowers: 44K • V4 active users increased every week throughout May and finished the month at a new high User growth alongside capital growth suggests adoption is broadening, not simply concentrating among larger holders. — ● Stable Rates Support DeFi Activity Stablecoin borrow rates remained low and stable throughout May, closing at 3.28% APY. • Stablecoin borrow rate: 3.28% APY Predictable borrowing costs make it easier to run leveraged and yield-generating strategies, giving users greater confidence to deploy capital. — ● GHO Is Evolving Beyond A Stablecoin The sGHO upgrade signals a broader strategy shift, moving from a traditional savings product toward a fixed-yield asset. • $sGHO fixed yield: 4.25% APR • @GHO migrated: 126M • Remaining in legacy contracts: 89M The shift positions GHO as a yield-bearing asset that other protocols, treasuries, and capital allocators can build around. — ● Expanding Beyond The Core Market Recent governance proposals point toward a broader effort to expand reach across new users, assets, and liquidity sources. • Deployment proposal on @monad • Native $BTC collateral through @babylonlabs_io on V4 • V4 expansion to @Avalanche • Integration with @circle's @Arc ecosystem and tokenized RWAs The common theme is expanding the protocol's addressable market through new chains, Bitcoin liquidity, stablecoin infrastructure, and institutional capital flows. — The broader takeaway is that the protocol is expanding beyond lending into a larger financial network spanning stablecoins, Bitcoin liquidity, new chains, and institutional infrastructure. That evolution may prove more important than any single metric in the report.

May was a big month for @aave. → $160M DeFi United coordinated recovery, no ghost left behind → V4 deposits 182% to a $119M ATH → sGHO upgrade live at a fixed 4.25% APR, with 125M $GHO already migrated There is plenty more to come: Monad is coming, V4 is expanding to Arc and Avalanche, and it's only getting started. The teams keep building, the fundamentals keep compounding and Aave has a bright future ahead. We are proud to keep contributing to Aave’s success.