Aave founder: RWA is the biggest opportunity in DeFi recently, but we need to be wary of institutions using DeFi as an exit liquidity channel.

According to Mars Finance, on March 8th, Aave founder Stani.eth published an article stating that "the private lending market is facing pressure from a high-interest-rate environment. Since the Federal Reserve began its rate hike cycle in 2022, interest rates have risen rapidly to over 5% and remained high, leading to a significant increase in capital costs for borrowing companies and consumers. Latest data shows that many funds are experiencing stock price declines and redemption pressures. For example, Blue Owl Capital has fallen by about 50% in the past year, and Blackstone's BCRED faced approximately $3.7 billion in redemption requests in Q1 2026. The average BDC is trading at a discount of about 20%, with a yield of 10-11%, and the default rate of some funds has risen to 9%." Stani.eth proposed three risk scenarios: a single fund default can be absorbed by the system, multiple fund defaults may trigger a credit cycle downturn, and a complete collapse may trigger systemic risk. However, the overall size of the private lending market is approximately $1.8-2 trillion, and a single fund default is unlikely to cause a systemic crisis. For DeFi investors, the biggest risk is that many retail users do not understand the risks involved before investing in high-yield RWA. I believe RWA is a DeFi... The biggest recent opportunity. However, my biggest concern is that institutional speculators might see DeFi as a channel to dump illiquid and distressed products that Wall Street has lost faith in, effectively using DeFi participants as exit liquidity. But well-functioning on-chain private lending offers advantages that traditional finance cannot match. DeFi can enforce redemption windows, withdrawal limits, collateral ratios, and yield distribution rules through smart contracts, achieving transparent and immutable execution and preventing traditional fund managers from arbitrarily tightening redemption policies. Through well-structured RWA projects, a transparent and secure investment channel can be provided between traditional finance and on-chain markets. DeFi should not become a source of exit liquidity for Wall Street.