Aave founder: Redemption pressure emerges in the private credit market, DeFi should not become Wall Street’s “bag holder”

According to Jinse Finance, Aave founder Stani Kulechov posted a long article on the X platform, stating that under a prolonged high interest rate environment, the global private credit market is showing signs of stress. As financing costs remain elevated and AI disrupts business models in the software industry, the repayment ability of some private credit borrowers is being questioned, and the market has begun to reprice such assets. Currently, the private credit market is mainly dominated by large asset management institutions such as KKR and Apollo, with a total scale of approximately $1.8 trillion to $2 trillion, and some funds are already experiencing redemption pressure. Stani Kulechov believes that although a single private credit fund default is unlikely to trigger a systemic financial crisis, if multiple funds encounter problems simultaneously, it could lead to difficulties in corporate refinancing and trigger a downward credit cycle. In the process of integrating RWA with DeFi, caution is needed to prevent traditional financial institutions from transferring illiquid or problematic assets to crypto market participants through on-chain structures. He bluntly stated that DeFi should not become a source of exit liquidity for Wall Street. If private credit can be standardized on-chain, with smart contracts clearly defining redemption rules, collateral ratios, and allocation mechanisms, while improving transparency and risk disclosure, DeFi still has the opportunity to outperform the traditional financial system.