Decentralized finance protocols appear to be showing signs of recovery, with lending and borrowing platform Aave hitting a new record in weekly active borrowers. 

In a post on X on Aug. 14, Aave founder Stani Kulechov reported that the lending and borrowing protocol has reached around 40,000 active weekly borrowers, eclipsing the previous high in late 2022.

 Data shows it has been driven by the emergence of new lending markets such as Base and Scroll.

Base now represents almost 30% of the total unique wallets on Aave V3, according to Dune analytics. Layer-2 platforms Arbitrum and Polygon are second and third, with Aave wallet shares of 23.4% and 21%, respectively.

At the same time, Kulechov noted that weekly depositors on the platform were almost at peak levels. According to Dune analytics, the number of Aave ( AAVE ) depositors spiked earlier this month.

DeFi rises again as Aave hits new ATH in weekly borrowers image 0 Aave weekly active borrowers. Source: Dune Analytics

Aave is a decentralized platform running on 12 chains specializing in overcollateralized loans. It enables users to deposit crypto to take out loans . It uses smart contracts to automate the process, with preset rules on how funds are distributed, collateral is handled, and fees are assessed.

Aave is the third largest DeFi protocol in terms of total value locked, according to DeFiLlama, with a reported TVL of $11.85 billion. While protocol TVL has increased 70% so far this year, it remains down from its peak of around $20 billion in October 2021.

Related: DeFi is ‘waking up again’ — Active loans return to 2022 levels

Meanwhile, there is a growing narrative within the crypto community that DeFi is on the rise again as protocols begin to recover.

Defiance Captial founder Arthur Cheong commented on the Aave growth on X, stating, “The mismatch between growth and valuation is where you get the best R/R for investing.”

In early August, Cointelegraph reported that DeFi active loans had returned to levels not seen since early 2022, at around $13.3 billion.

Additionally, TVL for the overall DeFi ecosystem has gained 40% so far this year to reach $90 billion. However, the market correction has caused it to take a hit recently.

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