Aave just passed a major marker for its V4 lending protocol: more than $1 billion in deposits, according to both Aavescan and recent governance posts. That is a jump of over $200 million in under a month, after Aave Labs reported V4 above $800 million in early September.
The sharp inflows reflect growing confidence in V4’s new architecture, which pools liquidity across different lending markets in the protocol’s hubs and spokes design.
But there is a catch. Governance documents and recent Arc data show that deposit growth does not automatically mean lending activity is picking up. Early V4 inflows have been heavily driven by migration from older Aave deployments, and in some cases, like Arc, deposits far outpace actual borrowing.
Arc pulled in about $76 million in USDC, but saw less than $100,000 borrowed right after launch.
So the clean read here is simple: Aave V4 has crossed $1 billion in deposits, but the borrowing side still looks thin. That makes utilisation the number to watch from here, because the milestone only means more if those deposits start turning into active loans.