DefiLlama founder 0xngmi says Aave’s TVL isn’t being “pumped” by circular borrowing, arguing the platform’s metrics already strip out borrowed assets and loops.
Summary

• DefiLlama’s 0xngmi says Aave’s TVL already strips out borrowed assets and loops.
• The founder argues circular lending and Ethena-style looping do not “artificially” boost TVL.
• Aave-focused DeFi strategies still face scrutiny as looping and collateral rehypothecation grow.

DefiLlama founder 0xngmi has pushed back on claims that Aave’s total value locked (TVL) is overstated because of circular borrowing strategies, insisting the data platform’s methodology already excludes borrowed assets from the headline metric. Responding on X to concerns that Ethena-style collateral loops were inflating Aave’s (AAVE) apparent size, 0xngmi said DefiLlama “doesn’t count borrowed assets in TVL,” meaning “cycled lending doesn’t inflate” the number in its dashboards.

He added that duplicate calculations tied to Ethena collateral loops on Aave had previously been removed from DefiLlama’s tracking, after users flagged that some looped positions were being reflected more than once in ancillary breakdowns. On its Aave and Aave v3 methodology pages, DefiLlama states that TVL “counts the tokens locked in the contracts to be used as collateral to borrow or to earn yield” and that “borrowed coins are not counted towards TVL,” specifically “to avoid inflating the TVL through cycled lending.”

Aave TVL methodology and Ethena looping debate {#aave-tvl-methodology-and-ethena-looping-debate}

The clarification comes as leveraged DeFi strategies built around Aave, Ethena’s USDe and restaking‑linked collateral have grown more complex, leading some traders to question whether raw TVL still reflects genuine, unencumbered liquidity. In a recent explainer, Aave described how Ethena’s model and related “looping” strategies can turn “a single capital base into leveraged fixed yield with extreme capital efficiency,” by repeatedly borrowing against and re‑deploying the same collateral stack.

Data compiled by DefiLlama and cited in previous crypto.news coverage shows Aave’s TVL has surged by more than 45% in some periods, climbing from roughly $24 billion to about $34.9 billion as network fees rose from around $48 million in June to $65 million in July, signalling heavier borrowing demand. As of mid‑2025, Ethena’s own TVL had jumped from $1 billion to nearly $11 billion, while protocol revenue more than doubled month‑on‑month, underscoring how loop‑enabled yield strategies now drive a large share of DeFi activity.

At the same time, Aave’s native token AAVE has traded with a market capitalization of roughly $1.45 billion and a 24‑hour volume near $666 million, with prices fluctuating between about $89 and $94 in recent sessions. According to the Aave price page on crypto.news, the token’s all‑time high remains $661.69, set on May 18, 2021, far above its current range as DeFiinvestors reassess risk in complex looping trades.

In an earlier crypto.news story, on‑chain data showed that net deposits into Aave had crossed $60 billion, even as AAVE’s price consolidated around $265, suggesting that deeper usage does not always translate into immediate token appreciation. DefiLlama’s 0xngmi maintains that, despite this structural leverage and the growth of collateral loops, the platform’s methodology means “TVL is not artificially inflated” by recycled borrowing, though he acknowledged that users still need to understand how much of that collateral ultimately underpins leveraged strategies.