0xngmi said Aave’s TVL is not being inflated by circular borrowing because DefiLlama’s methodology removes borrowed assets and already accounts for loop-related double counting.
DefiLlama founder 0xngmi pushed back on claims that Aave’s total value locked is being artificially pumped by circular borrowing. He said DefiLlama’s TVL methodology already strips out borrowed assets, so looping activity does not inflate the metric in the way critics suggest. He also reiterated that double counting tied to Ethena-related collateral loops had already been removed from the data. The comments address scrutiny around how DeFi lending metrics are calculated and whether Aave’s reported scale is being overstated.