After a 30% counter-trend rally in a single month, Aave sees another catalyst: Pledging US stocks on Base to borrow USDT—could this be the next blueprint for wealth?

TechFlow: Holding onto Nvidia and Apple shares but unwilling to sell, while wanting to withdraw USDC to trade cryptocurrencies on-chain, earn interest, or even grab some official subsidies? This strategy that once existed only in imagination has been fully realized on the Base chain today.

On October 14, with Base officially launching Earn & Borrow and integrating Aave, coupled with the Aave DAO's recent approval of USDC incentives for stock-collateralized positions, this experiment centered on an "on-chain Wall Street" has been placed directly in front of retail investors. For AAVE, which has defied market trends to rise nearly 30% over the past month, are these moves merely a short-term gimmick, or the starting point of a new round of valuation reshaping?

Over the past month, while the broader crypto market experienced volatility and steady declines, the veteran lending giant AAVE charted its own independent course: its token price stabilized above $160, logging gains of nearly 30% over the last 30 days.

The reason capital continues to bet on AAVE at this juncture, beyond expectations for the V4 architecture upgrade and solid revenue fundamentals, may well be another key catalyst: the tightly coordinated combo of "stock-collateralized lending + major channel expansion" rolling out densely on the Base chain over these past two days.

Let's start with the most-watched news today (October 14):

Base officially launched its new service named Earn & Borrow, while Aave immediately announced itself as the underlying core protocol.

Although the official Base press release used developer-oriented jargon like "end-to-end financial stack," its commercial logic is actually quite straightforward:

Base effectively built out a one-click "lending integration" plugin, enabling various third-party wallets, consumer-grade apps, and even traditional financial platforms to embed Aave’s yield-generating and lending pools directly into their interfaces.

As one industry professional remarked in the comments section of this announcement: "The next person borrowing on-chain will likely never open a DeFi website."

For investors familiar with the Base ecosystem, this hides a very crucial shift in landscape. Over the past year, on-chain lending traffic predominantly promoted within the Coinbase ecosystem was almost entirely monopolized by Morpho; however, with this launch of Base's official lending architecture, Aave has finally reclaimed its spot at the center, standing shoulder to shoulder with Morpho to jointly carve up Base's on-chain lending market, which currently exceeds $3 billion.

If integrating with Base Earn & Borrow solves the traffic gateway question of "where to find new users," then another decision finalized by Aave the previous day (October 13) directly answers the "what attracts capital" question:

Subsidizing on-chain US stock collateral.

Back at the end of last month, Aave V4 opened a dedicated "Equities Hub" on Base, supporting users in using 7 tokenized stocks of tech giants issued by Coinbase (including Nvidia NVDAc, Apple AAPLc, Tesla TSLAc, etc.) as collateral to borrow USDC.

And on October 13, Aave DAO officially approved cash incentives in USDC distributed via Merql to these US stock-collateralized positions.

This means that while Base officially steps in to help pave frontend channels, Aave itself is transforming the world's largest asset pool (US stocks) into chips capable of generating yields and leverage on the backend.

With expanded traffic gateways on one side and cross-boundary adoption of underlying assets on the other, these closely timed operational shifts have prompted the market to reexamine the ceiling of AAVE's valuation.

Collateralizing Nvidia in AAVE and borrowing USDC?

Putting it back to practical execution, how exactly should everyday users participate? How do you calculate the ROI of this "deposit US stocks, borrow dollars, claim subsidies" playbook?

The core battleground for this entire setup remains the isolated market titled "Equities Hub" that Aave V4 exclusively carved out on the Base chain.

First, let's examine the quality of the underlying assets. All seven tokenized US stocks currently supported for deposit in this hub belong to the tech giants with the deepest liquidity and heaviest retail holdings, all carrying a unified "c" suffix: Microsoft (MSFTc), Apple (AAPLc), Google (GOOGLc), Amazon (AMZNc), Nvidia (NVDAc), Meta (METAc), and Tesla (TSLAc).

These tokens are not unsupported synthetic assets; rather, they are certificate-structured tokens issued by Coinbase to non-US qualified users, with the underlying real stocks held 1:1 in segregated accounts by regulated brokerages such as Alpaca Securities.

Notably, these tokens employ a "total return" design, where dividends paid by US stocks are automatically reinvested and reflected in your holding value through a token multiplier.

Once qualified users acquire these tokenized stocks on the Base chain, they can directly deposit them into Aave's Equities Hub as collateral to borrow USDC.

However, to guard against cross-market risk, Aave maintained considerable restraint in its parameter design. For instance, relatively stable performers like Microsoft (MSFTc) and Apple (AAPLc) received the highest leverage allowances, with collateral factors reaching 79% and 78%, respectively;

while Google (GOOGLc) and Amazon (AMZNc) follow closely at 76% and 73%; higher-volatility Nvidia (NVDAc) is set at 70%, and Tesla (TSLAc) along with Meta (METAc) are capped lower at 65%.

Furthermore, you can only deposit stocks to borrow USDC; direct short-selling to borrow others' Nvidia shares isn't supported within the pool, nor does it allow borrowing one stock with another as collateral. Meanwhile, the entire market's initial capacity is capped at approximately $29 million in collateral and $21 million in borrowed funds, completely isolated from Aave's main pools.

What truly gave this mechanism arbitrage appeal over the past couple of days is the Merql incentive program that just went live on October 13.

Prior to incentives, on-chain pledging of US stocks to borrow USDC merely bypassed the cumbersome account-opening reviews of traditional brokerages, but funding costs were hardly dirt cheap. With the Aave DAO approving the budget, users can now simply deposit the aforementioned seven US stock tokens into supply positions to directly share USDC rewards distributed via Merql on a pro-rata basis.

Based on current on-screen data calculated by the community, the APR for this supply-side USDC incentive sits around the 3% tier, while the interest rate cap for borrowing USDC from the pool is also kept low at roughly 3%.

This completes a highly attractive capital loop:

If you are already a long-term holder of Nvidia or Apple, tokenizing these stocks and depositing them into Aave won't just retain your exposure to US equity upside and dividend yields; you'll also directly pocket an additional ~3% USDC deposit subsidy;

and if you further borrow USDC at a 70% ratio to snap up new launches, farm yields, or allocate to other yield-generating assets, the deposit subsidy you receive perfectly offsets the interest cost of borrowing USDC; effectively completing an "interest-free, or even negative-interest-rate" on-chain stock pledge financing operation.

This is precisely why Aave founder Stani Kulechov noted when evaluating this mechanism:

"Previously, tokenized stocks could only be held or traded. Now they have truly become assets capable of producing liquidity."

Small Pool, Big Narrative

Currently, the AAVE setup of collateralizing US stocks to borrow USDC sees actual US stock collateralization amounting to mere millions of dollars.

If calculating purely based on protocol revenue, this $5 million stock collateral pool, even if fully utilized, would contribute negligible spread income to Aave DAO annually—a fraction compared to Aave V3's cryptocurrency-native fund pools soaring into the tens of billions.

But the crypto market operates heavily on narrative-driven momentum and imaginative upside.

For a long time, AAVE's valuation ceiling has been tightly locked within existing crypto leverage; only when bull markets arrive and retail investors frantically pledge ETH and WBTC to borrow and speculate does Aave reap massive profits; conversely, upon entering a bear market, as lending demand shrinks, protocol revenues plummet.

Yet the dual events unfolding on Base today have rewritten AAVE's narrative script:

On the asset side, Aave V4 demonstrated through its "Hub & Spoke" isolated architecture that it can transform the world's largest asset pool—public equities (US stocks)—into productive materials capable of generating yields and leverage, all without compromising the security of the main pool;

On the distribution side, by embedding Base Earn & Borrow, Aave has turned its own liquidity pools into the default financial backend for third-party consumer-grade applications.

Thus, when Coinbase handles tokenizing US stocks into compliant on-chain instruments, Base manages turning lending into invisible API plugins, and Aave takes care of providing underlying liquidity pricing and liquidation, the three collectively run a closed loop that bypasses traditional Wall Street brokers.

Narratively speaking, the highly lucrative, high-barrier business of "stock margin lending" that traditionally belongs to brokerage firms is being deconstructed into open-source code on-chain.

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