Aave Labs has made a notable acquisition by purchasing Stable Finance, a San Francisco-based company focused on consumer-facing blockchain services. This strategic move follows Aave’s growing interest in expanding its offerings beyond institutional markets.

Stable Finance, initiated in 2023, develops a mobile application that enables users to deposit funds via bank accounts, credit cards, or cryptocurrency wallets to earn yields on their stablecoin investments through decentralized markets that require overcollateralization.

The announcement of the acquisition was made public on Thursday, incorporating Mario Baxter Cabrera and his skilled engineering team into Aave Labs. Specific financial details regarding the acquisition have not been revealed.

This acquisition is part of Aave’s strategy to balance retail services alongside its ventures into institutional finance. Recently, Aave revealed collaborations with Maple Finance concerning yield-generating stablecoins and launched Horizon, a marketplace specializing in tokenized assets for institutional users.

Stani Kulechov, the founder of Aave Labs, remarked that this transaction “reinforces our commitment to turning onchain finance into everyday finance.”

Since its launch in January 2020, Aave’s ecosystem has accumulated over $37.25 billion in total value locked, per DefiLlama’s data.

The Ongoing Discussion on Yield-Generating Stablecoins

Aave isn’t alone in offering users yield through overcollateralized DeFi markets; Coinbase integrated the Morpho DeFi lending protocol into its application in September, allowing customers to lend USDC to earn yields exceeding 10.8%, a significant increase from the standard 4.5% through its traditional USDC rewards.

A similar partnership between Crypto.com and Morpho was announced in early October, which allows users to deposit wrapped ETH and borrow stablecoins to earn yields.

While the recently passed GENIUS Act in July 2025 restricts yield-bearing stablecoins, it does not explicitly ban DeFi lending platforms or stop exchanges from generating yields through onchain services. This regulatory gap has sparked concerns among traditional banking institutions, which assert that stablecoin loopholes threaten to siphon trillions in deposits from the US banking system.

Conversely, many in the cryptocurrency community have raised objections to these accusations. On September 16, Coinbase published a blog asserting, “the establishments now warning of ‘systemic risk’ are the very ones profiting from card processing fees that stablecoins could potentially eliminate altogether.”