Key facts
- Aave's V3 lending protocol is now live on the Monad layer-1 blockchain.
- The launch includes support for 12 assets, such as USDT, USDC, and Aave's GHO stablecoin.
- Monad Foundation has pledged $15 million in incentives for the first year.
- The Monad Foundation will also acquire and hold 10 million GHO tokens.
- Aave DAO is contributing 500,000 GHO as incentives.
Decentralized finance platform Aave has deployed its V3 lending protocol on the Monad layer-1 blockchain, expanding its lending ecosystem with support for 12 assets at launch. The initial market includes stablecoins such as USDT, USDC, GHO, USDe, mUSD, and AUSD, alongside wrapped assets like WETH, cbBTC, wstETH, weETH, syrupUSDC, and sUSDe.
This deployment marks Aave's first integration with Chainlink's Smart Value Recapture feature, which allows a portion of liquidation value to be returned to the protocol. The move aims to provide Monad users with access to an established borrowing market and Aave's GHO stablecoin, supported by significant liquidity incentives.
The Monad Foundation has committed $15 million in incentives over the first 12 months post-activation. Additionally, the foundation will acquire and retain 10 million GHO for over six months, while the Aave DAO will contribute another 500,000 GHO to encourage adoption on Monad.
Monad's mainnet launched on November 24, 2025, and had approximately $359.5 million in total value locked as of June 8. A risk assessment by LlamaRisk noted that early network usage had compressed after an initial surge, with liquidity concentrated in established protocols. LlamaRisk supported the deployment with conservative parameters due to Monad's short operating history.
The launch coincides with growing institutional interest in bringing tokenized assets into DeFi lending. Standard Chartered previously suggested that tokenized assets could drive deposits into Aave, which reached a peak deposit base of about $75 billion in October 2025. Centrifuge also revealed plans in April to bring tokenized Treasurys and other collateral to Monad, potentially utilizing Aave as a lending venue as the ecosystem develops.