DeFi has come a long way in the past two and a half years, with TVL growing from $39B to $170B (+336%) over t…

DeFi has come a long way in the past two and a half years, with TVL growing from $39B to $170B (+336%) over this period and now reaching a new all-time high. One of the biggest drivers of this growth has been Aave, whose v3 TVL expanded from $500M to $45B (+8,900%) over the same period. Aave’s share of total DeFi TVL has been up only, now sitting at ~27% of all DeFi. Also, with Aave v4, which will connect all markets into a unified liquidity layer, greater capital efficiency is expected. By separating liquidity storage from market logic through the new Hubs and Spokes architecture, v4 removes liquidity fragmentation, allows specialized markets to launch instantly with deep shared liquidity, and enables builders to innovate directly on top of Aave instead of competing with it. With the increased demand driven by several converging factors (stablecoin expansion, rising demand for onchain yield, TradFi using DeFi for greater capital efficiency, and RWAs moving onchain), DeFi TVL may grow even faster in the coming years. In 2025 alone, DeFi TVL increased from $115B to $170B (+48%). If this pace continues or accelerates, it's not unrealistic to think that DeFi could reach $500B to $1T in TVL by 2027–2028.