Aave Turns Tokenized Stocks into Collateral for USDC Loans on Base
Aave has integrated tokenized stocks as collateral for USDC loans on Base. The seven tokenized stocks from Coinbase, including those from Aerodrome, can now be used to borrow USDC without selling their holdings. This allows equity holders to utilize their holdings and unlock access to capital in the decentralized finance (DeFi) space.
The integration of tokenized equities into DeFi lending uses Chainlink pricing to value collateral values. However, the market remains limited to eligible non-U.S. users at this time. The rapid growth in tokenized-equity trading on Base has exposed a liquidity gap beneath headline volumes, with about $1 billion changing hands over 30 days.
Aave must manage the risk of stock prices moving faster than market liquidity can absorb during periods of volatility. To mitigate this risk, the Equities Hub limits borrowing through 65%, 79% collateral factors across seven stocks, providing a layer of protection from volatile movements.