Aave Opens Regulated Access to DeFi Lending Through Banks

Aave has received new permissions to work with crypto assets in the United Kingdom. FCA registration was obtained by the companies Push Labs and Push Virtual Assets, which are developing the payment direction of the ecosystem.

The news attracted the community’s attention not only because of the permission itself. Many market participants are trying to understand what role Push will play in the Aave ecosystem and how much this project is connected to the protocol’s core business.

At the same time, the Irish division of Push previously received a CASP license under the MiCA rules. Thus, Push obtained the necessary permissions both in the United Kingdom and in the European Union.

This will allow the service to work with stablecoins in regulated markets and gradually launch new financial products for users.

Aave Founder Stani Kulechov also stated that the company will be able to develop a new generation of on-chain financial products for ordinary users.

The core business of Aave is still lending. The protocol holds nearly $14 billion in user funds, and the volume of loans issued has already exceeded $10.7 billion.

Against this backdrop, the launch of Push looks like an unusual step. However, the company sees the service not as a separate product, but as a way to bring new users into the Aave ecosystem.

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This is exactly the role the service is supposed to play. Push is being created as a regulated gateway between bank accounts and the Aave protocol. Through it, users will be able to convert regular money into stablecoins and then use them within the ecosystem to work with GHO, savings products, and lending.

Why Payment Products Previously Did Not Work for Aave

In February, Marc Zeller conducted a management audit of Aave Labs and estimated the company’s total funding at about $86 million. This amount included $16.2 million raised through the ICO EthLend in 2017, $32.5 million from venture rounds, $31.9 million in direct payments from the DAO, and about $5.5 million in swap fees, which he called unauthorized.

Zeller evaluated all this with three questions: what Labs actually launched, how much it cost, and what result it brought.

As a result of the audit, he concluded that products outside the main protocol did not show sufficient efficiency. Separately, Zeller highlighted Horizon, the RWA marketplace of Aave. According to him, the ratio of expenses to revenue there was about 24 to 1.

The main complaint was that Labs developed products around the Aave brand, but without noticeable benefit to the protocol itself. For example, part of the swap fees went to a wallet controlled by Labs, not to the DAO treasury.

This criticism influenced the vote on AIP 469, which was supported by about 75% of participating tokens. As a result, the Aave Will Win plan was adopted. It established a rule that 100% of income from all products under the Aave brand must go to the DAO treasury. This applies to the frontend application, Aave Card, Aave Pro, swaps, and future user products.

In exchange, Aave Labs received a grant of $25 million in stablecoins and 75,000 AAVE with a vesting period of 48 months.

Zeller’s Aave Chan Initiative voted against, using 166,200 tokens. This was the largest single vote against the initiative. After that, ACI announced that it would completely wind down operations by July.

The conflict over protocol management changed the approach to controlling products that are not part of Aave‘s core business. This directly affected the development of Push.

Now, Aave Labs cannot independently receive income from payment services and other products related to the ecosystem. Any revenue generated by Push must be distributed under the revenue distribution model approved by the DAO.

In fact, the incentive system itself has changed. Previously, Labs could develop a separate fintech product for users, but now Push is seen as a tool for attracting new clients to the Aave ecosystem. At the same time, all commercial benefits from its operation should ultimately go to AAVE token holders through the DAO treasury.

Payments as a Tool for Attracting Users, and Lending as the Core Business

In January, Stani Kulechov noted that most activity in Aave is still connected to ETH, BTC, and leverage strategies, which are highly dependent on crypto market cycles.

At the same time, the scale of the stablecoin market itself significantly exceeds Aave‘s current figures. There are about 584 million GHO in circulation, while the capitalization of USDT already exceeds $188 billion, and USDC is estimated at about $76 billion.

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The potential audience for Aave is much broader than its current user base. The main problem is that it is still difficult for ordinary people to enter DeFi without using crypto infrastructure and many intermediary services.

The protocol itself is already generating significant revenue. According to available data, the annual volume of fees exceeds $633 million, and annual revenue is more than $81 million.

This is where Push comes in. Its task is not so much to earn on payments, but to simplify the user’s path from a bank account to Aave products.

The scenario looks quite simple: the user transfers money from their bank account, exchanges it for stablecoins without commission, and then gets access to the Aave ecosystem. The funds can then be used to work with GHO, placed in savings products, or used as collateral for loans.

Unlike classic payment services, which usually earn on exchange fees, subscriptions, or payment charges, Push will benefit the ecosystem in a different way.

The more actively users use Aave products after converting funds, the more revenue the protocol itself receives. Funds can come through deposits, GHO issuance, sGHO storage, or the use of lending products.

Already, the Irish MiCA license allows Push to exchange euros for stablecoins without commission. Recent FCA permissions expand this infrastructure to the UK market as well.

At the same time, they will have to compete with major players such as Coinbase, MoonPay, Ramp, and Revolut, who also operate in the fiat-to-crypto conversion segment.

The advantage of Push lies elsewhere. The service is built as a non-custodial solution and simultaneously operates in several regulated jurisdictions. This removes one of the most difficult steps for new users—transitioning from the traditional financial system to DeFi.

If even a small portion of the funds passing through Push remains inside the Aave ecosystem, the effect could be significant. According to the company, retaining just 2.5% of the converted volume as deposits would provide about $500 million in liquidity. This is comparable to the current capitalization of GHO.

In fact, Push could become a new channel for attracting users to Aave, independent of speculative crypto market cycles and leveraged trading demand.

What Could Hinder Push’s Success

Skeptics have a fairly understandable argument. The risk is that Push will repeat the fate of other side initiatives of Aave, which were actively developed but did not bring noticeable benefits to the protocol itself.

The main question is not the number of users or transaction volumes, but how much money will ultimately remain within the Aave ecosystem.

If users simply convert money into stablecoins through Push and then send them to external wallets or use them on other platforms, the service will become an expensive infrastructure without tangible benefits for the protocol.

The obtained FCA and MiCA licenses grant the right to operate in regulated markets, but by themselves do not guarantee an inflow of deposits. For this, Push will have to compete with already established services like Revolut, Monzo, and Coinbase, which have long been in this segment and have strong brands, ready infrastructure, and large client bases.

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There is also a regulatory factor. The UK authorities have already stated that current registrations under anti-money laundering rules will not automatically transfer to the new licensing system based on FSMA. The full transition to the new rules is scheduled for October 2027.

Therefore, current permissions allow Push to enter the market, but do not guarantee that the company will easily pass the next stage of regulation.

In addition, the model in which Push‘s revenues must work in the interests of AAVE holders largely depends on the team’s ability to implement a long-term strategy for consumer product development and maintain community support.

At the same time, the requirements for Push‘s success do not look too high. Aave‘s liquidity is already quite large, so the project does not need to attract billions of dollars. Even if only a small portion of users remain in the ecosystem and deposit assets into the protocol after converting funds, this may be enough to justify launching the service.

This is where it will become clear how successful the whole idea of Push is. If the service can not only attract users but also retain them within the Aave ecosystem, it can become the main channel for bringing new capital to the protocol. In this case, Marc Zeller‘s approach to evaluating product effectiveness will be confirmed in practice for the first time.

But another scenario is also possible. If Push only provides fiat-to-stablecoin exchange without further use of Aave services, questions about the project’s effectiveness will arise again. Then the community may face another debate about whether the new product helps the lending market develop or simply expands the ecosystem without tangible benefits for the protocol.

In fact, the Aave Will Win model was created to test such initiatives. Push became the first project to undergo this test in a regulated consumer market. Its results will show how well the chosen strategy really works for Aave‘s long-term growth.

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In a broader sense, the story of Push shows how the DeFi market itself is changing. Previously, most protocols were primarily aimed at crypto enthusiasts, but now more and more projects are trying to reach a mass audience. For this, it is not enough to offer high yields or a convenient interface. Clear ways to fund accounts, work in a regulated environment, and a familiar user experience are needed.

That is why the success of Push will be interesting not only for Aave. Its results may show whether major DeFi projects are able to attract users from the traditional financial system without intermediaries such as banks and centralized crypto exchanges.

If Push succeeds in this task, Aave will gain not just a new product, but a clear bridge between bank accounts and DeFi lending, where it will be easier for users to stay. This will allow the protocol to attract new capital even outside periods of active crypto market growth.