Aave Founder: The next step for DeFi is to provide financing for solar energy, robotics, and space.

From many perspectives, the infrastructure financing of the future is a hard asset with cash flow.

Author: Stani.eth

Translation: Deep潮 TechFlow

Deep潮 Guide: A quantitative investment paper written personally by the founder of Aave: he individually estimates the capital expenditures of solar energy, data centers, robotics, nuclear energy, and space infrastructure, concluding that the real market size facing DeFi is $100-200T, which is 15 times the total assets under management of the top ten global banks. Whether the argument is valid is another matter, but this analytical framework alone is worth every RWA track enthusiast reading carefully.

Full text below:

I previously wrote that DeFi has improved the supply side of capital allocation problems. On-chain liquidity is highly liquid and can be transferred programmatically to higher risk-adjusted return opportunities. Aave has already demonstrated its ability to absorb hundreds of billions of dollars in liquidity, thanks to years of trust accumulation and its superior cost structure in crypto collateralized lending models.

This liquidity creates huge opportunities for emerging financial primitives and use cases. The next evolution of DeFi should focus on demand-side issues, rebalancing liquidity equilibrium.

I also previously wrote that just solar infrastructure alone could bring Aave a $30-50T opportunity. But this is far from the end; the future opportunities Aave can tap into exceed $200T.

The infrastructure that supports everything, providing financing for all

The most fundamental layer that keeps everything running is infrastructure. This layer ensures our electric vehicles have range, homes stay warm and lit, water flows normally, computers can compute, and the world remains connected.

From a capital allocation perspective, infrastructure is seen as a safe choice. The world needs energy, water, computing power, and communication. Established infrastructure also bears the technical risks that decrease over time and scale, gradually shifting from technological opportunities to financial ones as they mature.

While considered stable and safe, emerging infrastructure also offers higher-return, high-reward allocation opportunities. Technologies are still early in their cost curves, and risk premiums are correspondingly more substantial.

Infrastructure (the right type) is a high-quality financial product because it typically involves large capital expenditures needing financing and low operational costs—meaning operating costs are low enough that debt can be repaid over the asset’s lifecycle. In many ways, future infrastructure financing is a cash-flow-generating hard asset.

Most importantly, when structured correctly, infrastructure finance follows Aave’s lending model—lending against the asset itself, not against user credit, similar to how Aave operates today.

How big are the opportunities?

I believe key infrastructure assets vital for the world’s transition to abundance include: solar farms, batteries, data centers and GPUs, electrified transportation, robotics, seawater desalination, mineral extraction, carbon capture, nuclear energy, and space infrastructure. If something isn’t on this list, it’s not due to a lack of confidence but to illustrate the broad scope of this category. As long as an asset qualifies as an “abundant asset” and isn’t declining into obsolescence, it’s likely a reasonable choice.

Solar and batteries: Solar alone represents $15-30T in capital expenditure needs. At this scale, solar is expected to replace fossil fuels before 2050. I’ve detailed this in my previous articles.

Data centers and GPUs: The cumulative capital expenditure for GPUs and data centers ranges from $15-35T, depending on AI adoption sensitivity. McKinsey estimates that by 2030, $6.7T in capital will be needed. My consistent logic is: more computing power means more calculations and more complex tasks. Moore’s Law has its limits, but we are entering atomic-level engineering and vertical layering of GPUs, and these advances won’t stop us from building more compute. Quantum computing is not yet factored in, but it could drive another wave of distributed computing expansion.

Robotics: Automation of human tasks will be a defining feature of our transitioning world. Robots, whether dedicated warehouse systems or humanoid robots for daily physical tasks, will replace human labor and give us more freedom. By 2050, robotics could require $8-35T in capital expenditure.

Electric vehicle infrastructure: Electrification of transportation (cars, railways, aircraft, drones, charging networks, ships, ports) is on the cusp of a large-scale shift from fossil-based to electric power systems. Estimated capital expenditure by 2050 is about $10-25T. Autonomous driving will ensure no vehicle remains idle; they will serve society around the clock.

Nuclear energy: I have a love-hate relationship with nuclear as a abundant asset. It’s a reliable choice for large-scale energy production. However, nuclear is deeply tied to policy, making innovation and financing difficult. Projects are often more expensive and longer in duration than expected. Small modular reactors and better policy frameworks could change this. My conservative estimate for 2050 capital expenditure is $3-8T, constrained by policy.

Solar-powered seawater desalination: Desalination isn’t new; it’s been around for decades, with Middle Eastern countries heavily reliant on it. Costs are still high, but with scale efficiencies and solar development, near-free water could be available worldwide. Capital expenditure needed: $6-12T by 2050.

CO2 capture: Growth driven by government incentives. Estimated capital expenditure: $3-8T by 2050.

Critical minerals: Copper, lithium, nickel, and rare earths powering electrification, robotics, and more. Estimated capital expenditure: $5-15T by 2050.

Digital networks: Fiber optics, communication towers, and ground stations for satellites. Estimated capital expenditure: $6-15T by 2050.

Space infrastructure: As a scale factor, space will see significant growth with the scale effects of transportation and launches. Space will be an infrastructure investment opportunity over the coming decades. Conservative estimate for 2050 capital expenditure is $2-6T, but this could multiply higher if launch costs decrease 10-50 times per historical cost curves. Opportunities include: satellite constellations ($3-8T), launch infrastructure ($1-3T), orbital infrastructure (fuel tugs, servicing stations—essentially orbital logistics hubs) ($2-7T), space-based solar ($2-10T), space manufacturing ($1-5T), and lunar infrastructure ($1-5T).

I’ve skipped hydrogen production because I’m uncertain how it will evolve within the broader electrification transition.

In total, infrastructure financing could present about $100-200T in opportunities for DeFi. For reference, the top ten global banks manage roughly $13T in assets. Successfully financing most of this transition could make Aave the largest financial network to date.

Choosing the right form for Aave

Infrastructure financing in DeFi can take two main forms.

Path one: Yield-bearing stablecoins (YBS)

YBS is becoming a powerful example of off-chain income distributed to on-chain users. Ethena mainly achieves this through basis trading; USD.ai via GPU financing. Staking sUSDai yields 10-15% annually.

From Aave’s perspective, YBS growth directly translates into protocol growth. Aave is a circular machine: if the yield on YBS infrastructure products exceeds Aave’s cost of funds (about 4-5%), there’s a cycle opportunity—borrowing liquidity from Aave using YBS as collateral and redeploying it. I see YBS as an on-chain yield distribution wrapper, similar to traditional off-chain funds.

Path two: Direct collateralization

Using tokenized infrastructure directly as collateral means the yield or economic benefit remains off-chain or with the borrower, but through collateral and borrowing demand flowing into Aave, stablecoin supply yields are generated for depositors. This path isn’t aimed at maintaining stable net asset value, making it suitable for assets with volatile NAV that can’t be tested via stablecoins.

Which path will prevail? Hard to say. Both have advantages, and Aave supports both well. Examples of YBS include Ethena’s sUSDe and Maple’s SyrupUSDT. Examples of direct collateralization include Tether’s gold (xAUT), Bitcoin and Ethereum-backed loans, and JAAA RWA funds—where underlying economic returns go to asset owners, with Aave acting as an intermediary paying interest to on-chain depositors. Notably, Aave’s own aTokens (like aUSDC) are, in a sense, the earliest form of on-chain YBS in this use case.

The choice depends on user types. The former may appeal to on-chain allocators maximizing YBS yields; the latter to operators or funds seeking to expand liquidity and build more infrastructure without directly targeting stable yields.

Are yields sufficient?

While DeFi currently has excess capital under the prevailing interest rate environment, infrastructure financing should offer enough upside to transfer this capital. Average internal rates of return across sectors: solar 10%, batteries 12%, data centers 13%, EV charging infrastructure 13%, water infrastructure 9%, space infrastructure around 18%. The higher the technological risk and the earlier the position on the cost curve, the higher the expected returns.

Returns can be further enhanced through strategies. Vaults on top of Aave V4 can allocate to solar farms yielding 8-12%, using these as collateral to borrow GHO (creating high-yield profit space for Aave), then redeploy GHO into battery farms with 12-18% yields, or even GPU data center opportunities with 10-20% annualized returns.

DeFi users are typically sensitive to redemption risk and lock-up periods (this may change as the track matures). Infrastructure products usually generate cash flow, helping mitigate redemption risk. Using Aave as a liquidity wrapper makes these products more accessible—users can supply liquidity to specialized hubs focused on these economic features and trust assumptions, isolating and controlling risk while accessing infrastructure opportunities. The key difference is that tokenizing the assets themselves enables auction-based liquidation, improving liquidity features compared to slow-layered debt-encapsulation funds.

Aave as a Financial Infrastructure Layer

The best way for Aave to enter RWA and infrastructure opportunities is as a foundational layer of financing liquidity, starting from the low-technical-risk mature end (solar) and gradually moving toward higher-risk assets, leveraging the fine risk control provided by Aave V4’s hub architecture.

Today, most RWA tokenization focuses on assets with deep liquidity markets: treasuries, money market funds, corporate credit. These assets trade smoothly, and users have ample channels to borrow them. Similarly, while private credit appears to be an attractive DeFi use case, it also has drawbacks. Private credit often involves CLOs, corporate, and private equity financing. If the infrastructure layer is the bottom, then this is the top. In a world transforming faster than ever, especially at the top, assets need to tilt toward the future we are building, not the past we are leaving behind. An asset-backed financial product that looks excellent on paper may lose its relevance in tomorrow’s world.

Tokenization of traditional financial assets will continue to grow and will certainly be part of Aave’s story, just as native crypto assets and their growth persist. But the bigger opportunity lies in becoming the future’s infrastructure financing layer. That’s what excites me about RWA and Aave.

What does this mean for fintech companies?

Large fintech firms are increasingly becoming the distribution and experience layer: the interface that delivers quality financial products to end users. I previously wrote that DeFi can enable fintech companies to unlock leaner cost structures for new financial products. DeFi operates almost autonomously, more transparently, and guarantees execution via smart contracts. It requires less operational expenditure, enabling higher profit margins and opening new financial opportunities.

In a world where financial access is commoditized and no longer offers a differentiated value proposition, the ability to access unique yield opportunities creates new value for fintech companies (and banks) and their users. Fintech companies actively participating in stablecoin issuance also open new use cases and real lending demand for stablecoins backed by infrastructure collateral.

Through Aave Kit and Aave App, fintech companies and banks can become perfect distribution channels for the yields generated by infrastructure collateral on Aave V4, which are closely tied to the future we are building. Connecting Aave with fintech and banks to inject capital can accelerate the transition to abundance by 10-15 years. This presents a unique opportunity for Aave and its partners to capture and share a $200T market value.