DeFiLlama founder responds to Aave TVL controversy: Circular lending effects have been removed, and related doubts lack basis

Golden Finance reports that 0xngmi, the founder of DefiLlama, posted on the X platform in response to the Aave TVL controversy. He stated that the current market view that Aave’s TVL is overestimated due to looping borrowing is not accurate. When calculating TVL, lent assets are excluded, so looping operations do not inflate TVL. For example: if a user deposits $1 million worth of ETH, it counts toward TVL; if another user deposits $1 million worth of stETH and borrows $1 million worth of assets, the transaction is “+$1 million -$1 million,” and the final TVL remains $1 million.
DefiLlama has proactively excluded double counting. Previously, it was found that Ethena depositing collateral assets into Aave and being reused by users caused TVL inflation, so related deposits have been removed from Aave’s TVL. The community’s related doubts lack basis.