Wall Street research is starting to look past the crypto-native label of DeFi lending. In a new Citi Research note on Aave, analysts Peter Christiansen and Aditi Balachandran describe the protocol as "a decentralized collateral mobility ecosystem" rather than just an onchain money market.

The 24-page report, titled "Aave: Bringing Real World Finance Onchain" and dated October 19, calls Aave the largest decentralized and permissionless lending protocol, with hundreds of billions of dollars in cumulative borrowing across multiple networks. It points to Aave V4, Horizon and GHO as initiatives building the intersection of collateral, liquidity and financing.

"We believe collateral mobility may ultimately prove to be one of tokenization's most important use cases," Citi wrote.

The bank's argument: tokenization answers how assets move onchain, while protocols like Aave may decide how those assets are financed, pledged as collateral and integrated into capital markets as Treasuries, private credit and eventually equities come onchain.