Aave sets sight on solar financing in long-term DeFi strategy

Aave is looking beyond traditional crypto lending as it explores a long-term strategy focused on financing solar energy and other real-world infrastructure. 

The shift was outlined in a recent post by founder Stani Kulechov, who argued that decentralized finance can play a major role in funding the global energy transition.

Kulechov said on-chain lending has already proven its technical strength with digital assets. The next step, in his view, is to bring productive, real-world assets such as solar farms into DeFi and turn them into usable collateral.

Turning solar projects into liquid assets

According to Kulechov, one of the main problems in solar and infrastructure financing is illiquidity. Most projects rely on long-term contracts that can last 20 years or more. Investors often accept lower flexibility in exchange for stable returns, but this also limits the amount of capital that can enter the sector.

Tokenization could change that. By turning solar projects into digital assets, investors would be able to trade and transfer their positions more easily. These tokenized assets could also be used as collateral on Aave (AAVE), allowing developers and financiers to borrow funds quickly instead of waiting months for traditional loans.

Kulechov said this could lower required returns and make projects more attractive. A solar asset that needs a 10% return in private markets might only need 6% if it becomes liquid and tradable. Over time, this could help recycle capital faster, letting the same money fund multiple projects instead of being locked up for decades.

He also pointed to the potential impact on stablecoins. Because solar farms are spread across many countries, their debt could be issued in different currencies. This could create new demand for euro- and pound-backed stablecoins, giving users more options beyond U.S. dollar lending.

Building a new model for DeFi growth

Lending against major cryptocurrencies has grown crowded and fiercely competitive, as per Kulechov. Similar products are currently offered by many DeFi platforms, which has decreased long-term growth potential and pushed down margins. 

He argues that solar-backed lending presents an alternative. Aave might fund initiatives that produce actual cash flows and long-term value rather than depending on speculative assets. This would give depositors access to “green yield” while helping fund clean energy development.

He also stressed that most retail investors currently have limited access to solar investments. High minimums and complex structures keep many people out. On-chain products have the potential to reduce these obstacles and increase accessibility to infrastructure financing.

He believes that this strategy reflects a drastic change in the way that capital ought to be distributed. DeFi platforms should support assets that are productive and future-proof rather than concentrating on government debt or struggling industries.

Kulechov described this as an “opinionated” strategy. Users who choose solar-backed products are not just looking for returns, he said. They are choosing to fund creation over extraction and long-term growth over short-term fixes.

If the model works, it might result in a parallel financial system with real infrastructure and revenue supporting lending products and stablecoins. 

“Aave Will Win,” Kulechov concluded, framing the shift as both a business strategy and a statement about the future of DeFI.