We are experiencing a paradigm shift. Today's technologies are enabling humans to produce more value than ever before, and access to these value creation tools is more equal than ever before. The internet democratized access to an abundance of information, services at a global scale and locationless work, setting the foundations for an even larger disruption.
Finance acts as lubricant to accelerate transformations from the past into the future. Now, for the first time ever, we have the potential to capture the largest transformation in humanity's history and fund it directly onchain.
I wrote earlier about how onchain lending has mastered resiliency and proven its technical superiority with crypto-assets, and how DeFi has become an extremely efficient global capital aggregation layer. Solving DeFi's scalability problem is a demand-side problem. Capital is hungry for new collateral, and the world is ready for a transformation that onchain lending can capture and accelerate.
We are talking about the transformation into an abundant future: a 30 to 50 trillion dollar value capture market for Aave between now and 2050.
Finance Enables Major Transformations
Finance has always catalyzed humanity's most important transformations.
Mesopotamian Irrigation (3000+ BC). Temple treasuries financed canals that made large-scale agriculture possible, enabling the first cities and civilizations. The food surplus created conditions for specialized labor, trade, and writing itself, which was invented to track grain debts.
Age of Exploration (1400s to 1700s). Queen Isabella and Ferdinand acted as venture capitalists, funding Columbus with the promise of 10% equity in discovered lands. The Dutch East India Company (1602), worth $7.9 trillion in today's money, didn't just trade. It built the infrastructure of global commerce through unprecedented capital formation.
Industrial Revolution (1760s to 1870s). Steam engines and textile mills required massive upfront capital. Country banks proliferated across England, roughly 800 by 1810, channeling agricultural wealth into industrial investment. This geographic transfer of capital from farms to factories transformed society.
Railways (1830s to 1880s). Britain's railway mania and U.S. railroad bonds attracted enormous public investment, creating the template for modern corporate finance. Railways reshaped economies and shrank distances.
Electrification (1880s to 1930s). J.P. Morgan financed Edison's early work and consolidated utilities into General Electric. The creation of regulated monopolies with guaranteed returns gave investors confidence to fund massive grid buildouts that transformed daily life.
Mortgages (1930s to present). The 30-year fixed-rate mortgage, backed by FHA insurance and Fannie Mae, enabled U.S. homeownership to rise from 44% in 1940 to nearly 70% by the 2000s, the greatest middle-class wealth creation event in history.
The pattern is clear: finance doesn't just fund existing activity. It enables entirely new forms of economic organization.
What Is Abundance?
Abundance is when something scarce, expensive, and accessible only to a few becomes cheap, plentiful, and available to all.
For most of history, the default was scarcity. Not enough food, energy, medicine, information, or capital. Societies organized around managing scarcity: who gets what, and who goes without. Wars, political systems, and economic structures were fundamentally responses to not having enough.
Abundance happens when technological breakthroughs, combined with the right financing and distribution, collapse costs so dramatically through economies of scale that the constraint effectively disappears, not for one person, but for billions.
Information went from a medieval book costing a lifetime's earnings to a smartphone giving a Kenyan farmer more knowledge than a 19th-century king. Communication went from $300 for a three-minute transatlantic call in 1930 to free on WhatsApp. Computing went from $1 million per gigabyte in 1967 to two cents today. The internet and computing enabled AI, giving everyone access not just to information but to reasoning capability.
Now we are moving toward an abundance of physical resources: solar for energy, batteries for energy storage, robotics for labor, solar desalination for water, vertical farming and lab-grown food for nutrition, semiconductors for computation, and 3D printing for materials.
Economies of Scale: The Engine of Abundance
Economies of scale is the phenomenon where cost per unit falls as you produce more. It is how abundance technologies actually become abundant.
The first unit of anything, whether the first solar panel, Model T, or smartphone, bears the entire weight of R&D, factory setup, tooling, and mistakes. It is astronomically expensive. But each subsequent unit is cheaper. At scale, costs drop so low that luxuries become commodities, and commodities become essentially free.
Model T (1908 to 1927). Ford's assembly line reduced build time from 12 hours to 93 minutes. The price dropped from $850 ($28,000 in today's dollars) to $260 ($4,600 today). By 1927, Ford had produced 15 million cars, transforming the automobile from a rich man's toy to a mass-market tool.
Solar PV. The most dramatic modern example. In 1976, solar cost $106 per watt. Today it costs $0.20 per watt, a 99.8% decline. Every doubling of cumulative production reduced costs by 20 to 25%, a pattern known as Swanson's Law. China's gigafactories achieved unprecedented scale, driving a 90% cost reduction between 2010 and 2020. Solar is now the cheapest electricity source in history, often below $0.02/kWh in sunny regions.
Semiconductors. Moore's Law wasn't physics. It was manufacturing scale. Cost per transistor fell by a factor of 10 billion since the 1960s. A $200 smartphone today has more computing power than a $10 million supercomputer from the 1990s.
Lithium-Ion Batteries (1991 to present). Cost fell from $7,500/kWh to under $140/kWh today, a 98% decline. Tesla's Gigafactory was designed to produce more batteries than the entire world produced before it opened, driving costs down through pure scale.
Genome Sequencing. The first human genome cost $2.7 billion and took 13 years, completed in 2003. Today it costs under $200 and takes less than a day. Costs fell faster than Moore's Law, enabling personalized medicine and CRISPR gene editing.
The pattern is consistent: plot cost against cumulative production and you get the same steep decline across every abundance technology. But these curves don't happen automatically. They require enormous upfront capital investment before any cost reductions materialize. Someone must fund the expensive early units so the cheap later units become possible.
This is finance's fundamental role in creating abundance: absorbing upfront risk and cost so the economies-of-scale curve can do its work and advance the future.
The Scale of Deployment Today
The path to abundance takes time, but the trajectory is accelerating. Consider solar PV and battery storage as examples.
Solar PV:
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Global capacity reached 1,600 to 1,700 GW by the end of 2024, up from 40 GW in 2010.
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2024 additions totaled 400 to 450 GW, more in one year than total capacity a decade ago.
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China has 600 GW installed and is adding 200+ GW annually.
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The U.S. has 180 to 200 GW installed, adding 30 to 40 GW annually.
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Solar now represents the majority of new generation capacity globally.
Battery Storage:
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Grid-scale storage reached 90 to 100 GWh by end of 2024, up from less than 5 GWh in 2017.
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EV batteries represent 1,500+ GWh of mobile storage, with 500 GWh added in 2024 alone.
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The U.S. leads with 30 GWh of grid storage, with California accounting for half.
Timeline milestones:
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Solar is already economically dominant for new investments.
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Solar plus storage will undercut operating costs of existing fossil plants between 2027 and 2032.
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Solar will provide more electricity than fossil fuels globally between 2035 and 2040.
The transition is not linear. It will accelerate rapidly once it reaches critical mass. We are in the final years where fossil fuel dominance is unquestioned. The technology is mature and proven. Scaling solar PV is no longer a technical problem or a cost problem. It is an upfront capital investment problem.
The Capital Behind It
Global investment in solar and batteries has already reached extraordinary levels:
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Solar: $380 to $420 billion annually (2024)
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Batteries: $150+ billion annually ($25 to $30 billion for grid-scale alone)
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Total: $600+ billion annually and growing
Major financiers include:
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China deploys $200 billion annually via state development banks (CDB, EXIM).
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The U.S. invests $40 to $50 billion annually, surging after the IRA, with BlackRock, NextEra, and Brookfield leading.
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Europe contributes $60 to $80 billion annually via the EIB, BNP Paribas, and Société Générale.
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Sovereign wealth funds such as Norway's GPFG, Mubadala, and Saudi PIF are active participants.
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Development banks including the World Bank, ADB, and AfDB deploy $10 to $15 billion annually.
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Infrastructure funds raised $80 billion in 2023 and 2024, led by KKR, Macquarie, and GIP.
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Tech giants including Microsoft, Google, Amazon, and Meta have contracted 50+ GW of capacity.
These capital investments have proven the maturity of solar PV as a low-risk asset class.
Why Solar Is Ideal for Finance
Solar projects have unique characteristics that make them extraordinarily financeable.
Simple product. A typical solar project consists of an equity component (around 30%) and a senior debt component (up to 70%). The infrastructure is technically proven, simple to build, and straightforward to operate. The sun is predictable. Simplicity scales.
Predictable cash flows. There are no fuel costs. Solar irradiance is well-characterized with decades of data. Most projects are backed by 15 to 25 year Power Purchase Agreements with creditworthy offtakers such as utilities, corporations, governments, and major technology companies. This transforms the asset into something resembling a bond, backed by future-proof green infrastructure.
High leverage. Projects routinely achieve 70 to 85% debt financing, with some reaching 90%. An 8% unlevered return becomes 15 to 20% return on equity at 80% leverage. Senior debt costs just 200 to 400 basis points over risk-free rates.
Modularity and scale. Start with 5 MW, prove the model, then scale to 500 MW using the same playbook. A portfolio of 50 projects across different geographies provides diversification on a highly sought-after resource.
Mature technology. Two decades of deployment history have produced well-understood degradation curves (0.5% annually), 25 to 30 year warranties from Tier 1 manufacturers, and readily available insurance products. Risk is easily offset.
Deflationary arbitrage. Prices continue to fall even as projects deploy. Lock in PPA prices today and benefit when construction costs decline two to three years later. Existing assets face minimal obsolescence risk; a 2024 project won't be rendered uneconomic by 2030 technology.
Inflation hedging. Revenues escalate with inflation while costs remain fixed. The capital-intensive, opex-light structure means inflation affects the initial investment but not ongoing economics.
The Existing Funding Gap
To reach net zero globally by 2050, solar must become one of the largest sources of electricity on Earth.
Current solar investment stands at roughly $400 to $420 billion annually (2024). Total solar PV capacity needed by 2050 is estimated at 14,000 to 15,500 GW (14 to 15.5 TW). Current installed capacity as of 2024 is approximately 1,700 GW. That leaves a gap of roughly 12,300 to 13,800 GW to fill by 2050.
Total solar investment from 2024 to 2050 would need to be $10 to $12 trillion at a bare minimum, without accounting for economic growth.
For batteries, annual investments would need to reach $150 to $200 billion, totaling roughly $4 to $5 trillion through 2050.
These numbers assume global GDP grows approximately 40% larger by 2030 (versus a 2020 baseline), GDP continues growing at roughly 2 to 3% annually through 2050, population grows to 9.7 billion by 2050, and electricity generation grows at 3.3% annually through 2050, faster than GDP growth. This scenario does not include the wild card of an AI and data center boom. It also does not account for the fact that if energy becomes abundant, conservative usage patterns will convert to increased usage.
Conservative estimates call for 4 to 15 TW of solar and $10 to $12 trillion in investment. A moderate case, accounting for AI growth and faster emerging market development, requires 18 to 22 TW of solar and $15 to $20 trillion in investment. The ultimate state of abundance, where energy becomes so cheap that entirely new use cases emerge such as solar-powered water desalination at scale, would require 30 to 50 TW of solar and $30 to $50 trillion in investment.
If abundance technologies actually create abundance and energy approaches free, the economic growth assumptions are too conservative. Cheap energy triggers an industrial renaissance in emerging markets. Desalination drives an agricultural productivity boom. Climate control expands habitable areas. Energy abundance accelerates GDP growth.
This creates a positive feedback loop. More solar produces cheaper energy. Cheaper energy generates more economic activity. More economic activity drives higher electricity demand. Higher demand requires more solar. More solar produces even cheaper energy.
The investment need doesn't saturate. It expands.
The realistic range is $15 to $30 trillion in solar investment through 2050. The abundance case reaches $30 to $50 trillion.
For perspective, JPMorgan sits at $4.5 trillion in assets under management and BlackRock at $14 trillion. Investing in the future of abundance, especially solar and batteries, would become a bigger business than JPMorgan and BlackRock combined.
Even if just 10% of that activity could be captured by Aave, it would expand the economic collateral of Aave by an astronomical $1.5 to $5 trillion. With 25% market share, that grows to $3.75 to $12.5 trillion, positioning Aave to become the biggest financier of the world's transformation, all facilitated by Aave V4 and stablecoins, especially GHO and yield opportunity distributed via Aave App, Aave Pro, and Aave Kit to users and fintechs worldwide for the next 25 years.
From Scarcity Assets to Abundance Assets
The global financial system has structured itself around financing scarcity for centuries. Sovereign debt funds government operations constrained by tax revenues. Corporate debt finances businesses under competitive pressure and margin compression. Mortgages capitalize the scarcity value of land and housing in desirable locations.
These are backward-looking assets. They finance the maintenance and marginal expansion of existing systems built on resource constraints. They are fundamentally extractive: claims on future cash flows that must occur under existing cost structures. The bondholder's gain is the taxpayer's loss. The asset generates no new productive capacity.
The abundance economy represents a categorically different allocation thesis.
Every dollar invested in solar manufacturing drives costs down further through learning curves, making the next dollar more productive. This creates a positive feedback loop entirely absent in traditional debt. A solar investment funds an asset that makes energy cheaper, enabling economic activity that generates demand for more solar, which drives costs lower still. The return profile isn't just financial. It is civilizational.
Traditional debt scales linearly at best. Government borrowing faces debt-to-GDP constraints. Corporate leverage has natural limits. Mortgage debt is bounded by income. But abundance technologies scale exponentially while simultaneously reducing costs. Solar manufacturing can grow from 1 TW to 2 TW while driving prices down 20 to 30%. Scarcity assets become less valuable as they scale. Abundance assets become more valuable as they scale.
Real estate, the largest global asset class at $250 trillion, exemplifies the scarcity paradigm. Housing values derive from locational scarcity: proximity to jobs, amenities, and infrastructure. But abundance fundamentally undermines this premium. When energy becomes essentially free, geographical constraints dissolve. Robotics creates unlimited labor. Remote work is already frictionless. Climate control becomes trivial. Transportation electrifies and automates. Food can be grown anywhere with vertical farming and in labs.
The mortgage as an asset class represents a claim on scarcity rents that abundance systematically erodes. Every dollar of mortgage debt finances an asset whose fundamental value proposition, exclusive access to scarce resources, is being undermined by technological deflation.
Mortgages are not the only asset class that will be disrupted. The same dynamic will reshape corporate debt, particularly the portion that relies on funding businesses built on scarcity, and government debt issued by bloated, poorly managed states that overtax their citizens.
Abundance assets are antifragile to the forces that threaten traditional debt. Inflation destroys bond returns but leaves solar economics untouched. Recession reduces tax revenues but doesn't stop the sun from shining. Geopolitical instability disrupts fossil fuel supply chains but not decentralized energy production.
The capital currently locked in low-returning government and corporate debt, over $130 trillion globally, represents massive misallocation. It is financing the maintenance of scarcity-based systems while abundance technologies rewrite the rules.
I believe the financial system overindexes into lending and investing in assets that will fundamentally diminish in importance over time. These assets are not future-proof. This puts the global financial system at greater risk once these assets begin to lose their relevance, eventually stress-testing even FDIC-backed schemes. I believe that investing in or lending against future-proof hard assets is a more durable path forward, one that carries the premium of being early.
This transition doesn't require regulatory capture or government mandate. It happens through pure economic selection. Abundance-backed products offer better returns, better risk characteristics, and better values alignment. They win in the market because they are superior products.
The timeline compression from 2040 to 2030, enabled by tokenization and abundance-backed finance, represents perhaps a trillion dollars in avoided climate damages, trillions more in economic value from cheaper energy, and the difference between incremental change and civilizational transformation.
Financing abundance doesn't end with solar and batteries. The infrastructure needed for the future ranges from data centers to space infrastructure, from robotics to desalination. Solar is simply the best understood starting point, and it powers almost everything else.
Aave as a Growth Engine for Abundance
Onchain lending disrupts the cost structure of lending. DeFi capital flows into the best financial opportunities and DeFi protocols optimize the usage of the capital. Over the past years DeFi has solved global capital aggregation, the supply side. To scale onchain lending, we need to scale the demand side, bringing new assets onchain that absorb the hungry capital into new financial opportunities, which in return creates predictable yield for deposits and more revenue into the protocol.
I believe that tokenization is accelerating, and financial institutions such as banks and asset managers are actively looking to bring traditional assets onchain. We may see the entire $500+ trillion asset base come onchain over time. However, I believe the higher value from tokenization can be achieved by bringing assets onchain that do not have ISIN numbers and are not traded in existing venues, especially solar as a future-proof abundance asset.
Tokenization is key to making abundance assets compatible with DeFi. Tokenizing real-world assets has been an active topic for asset managers and banks. However, RWAs have been stuck at a $20 billion market cap despite nearly all large banks and asset managers having digital asset teams focused on this effort. While I do think that tokenizing existing tradable assets will keep growing steadily, the biggest impact from tokenization can be achieved by tokenizing abundance assets.
Tokenization for solar farms could take two forms: an equity sponsor component with 8 to 15% return on investment, and a senior debt component with 5 to 8% returns in mature markets. Solar also has built-in diversification, as a portfolio can consist of geographically decentralized projects with different maturities, protected by power purchase agreements from institutional-grade offtakers.
Aave Protocol can accept tokenized solar as collateral, enabling instant borrowing for solar developers. A solar debt financier with $100 million in tokenized project debt could borrow $70 million in stablecoins within minutes rather than months, immediately redeploying into new projects and scale the portfolio. At the same time, Aave depositors would gain access to enormously scalable, low-risk yield that is well diversified. Abundance assets solve the demand-side problem for DeFi liquidity, attracting entirely new demand for stablecoins on Aave and becoming an even stronger propeller for fintech-based stablecoin growth on Aave.
Current solar project finance is constrained by specialized infrastructure funds, with roughly $300 to $400 billion available annually. Global capital markets are vastly larger: $130 trillion in bonds, $110 trillion in equities. If tokenization enables just 5% of bond capital to access solar investment, that is $6.5 trillion, roughly 15 times current annual investment, and could potentially advance net zero by 10 to 15 years.
Infrastructure investors accept illiquidity premiums because there is no secondary market for 20-year PPAs. This limits allocations. A pension fund might allocate 3 to 5% to illiquid infrastructure when it would allocate 15 to 20% to liquid equivalents. Tokenizing abundance assets and using them as collateral in Aave would enable constant and instant access to liquidity, along with ease of transfer for stakeholders during the lifecycle of the asset. The same project might command a 10% required return as an illiquid asset but only 6% as a liquid token.
Traditional infrastructure capital locks up for decades. Tokenized assets allow continuous trading, meaning the same dollar can finance multiple projects over time. An investor might buy tokenized solar, hold for three years, sell at a profit, and immediately redeploy into new development. This capital recycling could double or triple productive capacity per dollar.
One of the most persistent chicken-and-egg problems for local stablecoins such as EUR and GBP is that there are very few demand-side use cases onchain. Typically, users who are long on their crypto collateral borrow in USD, and it works well because loans can be repaid with the collateral itself upon value appreciation. Since solar PV farms are globally distributed, they allow the creation of solar senior debt as collateral denominated in EUR and enable borrowing in EUR to scale. This by itself creates EUR and other local-currency stablecoin-denominated yield that can be distributed to users through Aave App, Aave Pro, and Aave Kit distribution channels for fintechs offering reliable green yield.
Distributing Abundance Yield
The real revolution is mainstreaming this opportunity through opinionated, future-proof products.
Currently, retail investors have limited access to solar through niche platforms with high minimums. Most capital is locked in old-asset exposure: 401(k)s filled with Treasury bonds, savings accounts yielding 2%, and mortgages at 6 to 7%. These instruments finance scarcity and extraction, not abundance and creation.
A solar-backed yield powered by Aave offers green yield that is future-proof, distributable across Aave's channels via Aave App, Aave Pro, and Aave Kit for fintechs.
The key point is this: DeFi and fintechs have long focused on providing access to a wide range of assets. The internet created unprecedented accessibility, and fintechs captured this opportunity. Open platforms that allow trading of any asset have become a commodity. Similarly, lending against Bitcoin and Ethereum has become a commodity in onchain lending.
Commoditization leads to intense competition and a road toward low, thin margins and diminished profitability.
It is time to be opinionated about the future and to back the assets that fund it. Aave's past has always been opinionated: which assets can be listed, which networks to deploy on, and how to shape user experience. Now it is time to take this opinionated approach across the whole stack and into the future.
These products are explicitly opinionated. Users choosing to earn on Aave against abundance assets aren't just seeking better returns. They are expressing a preference for funding productive assets over government debt, for abundance over scarcity, for creation over extraction. Abundance-backed assets represent a philosophical statement about capital allocation.
The end state is a parallel financial system where productive assets back monetary instruments, not solely government promises. Stablecoins become claims on real cash flows from real assets generating real value. The entire capital structure reorganizes around abundance rather than scarcity.
I believe that funding energy transitions is by far the largest opportunity for Aave. Funding government deficits or corporate bonds that merely extend a lifeline to declining models is a losing strategy, and it will eventually take asset managers and banks down with it. If the platforms that provide access to financial products are not opinionated about what they offer, the ones who suffer are the users.
The right path to building the best financial products is to have an opinion about what is future-proof and to build trust compounding on that conviction.
Aave Will Win.
