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Aave has deployed its V3.7 lending protocol on Monad, giving the layer-1 network a new lending market and support for Aave’s GHO stablecoin.
The launch brings one of DeFi’s largest lending protocols to Monad as the network works to build deeper liquidity for borrowing, stablecoins and on-chain finance apps.
12 Assets Are Supported at Launch
The Aave market on Monad supports 12 assets at launch: USDT0, USDC, GHO, USDe, mUSD, AUSD, WETH, cbBTC, wstETH, weETH, syrupUSDC and sUSDe. USDT0, USDC, GHO, USDe, mUSD and AUSD are borrowable at launch.
WETH and cbBTC can be used as collateral, while several liquid staking and yield-bearing assets are supply-only in the first setup.
The configuration gives Monad users a working credit market for stablecoin borrowing, collateralized positions and liquidity management. It also brings GHO into another chain environment after earlier expansion beyond Ethereum.
$15M Monad Incentives Target Liquidity
The Monad Foundation has committed $15 million in incentives during the first 12 months after activation. The foundation also agreed to acquire 10 million GHO and hold it for more than six months. The Aave DAO will provide 500,000 GHO in incentives to help grow use of the stablecoin on Monad.
The incentives are meant to seed deposits, borrowing and app integrations while the market builds organic activity. The next phase outlined in governance materials includes possible support for Pendle principal tokens and Fastlane’s shMON.
Chainlink SVR Starts From Day One
The Monad deployment is also Aave’s first launch with Chainlink Smart Value Recapture enabled from the start.
The tool allows part of the value created during liquidations to be redirected back to the protocol. That gives Aave a way to recapture some liquidation-related value as it expands across newer networks.
Risk Reviews Cleared Monad Deployment
Aave risk reviews found Monad technically ready for deployment, with Chainlink integration, Safe support, explorer coverage, wallet compatibility and tested cross-chain governance paths in place.
The reviews also noted that Monad is still a newer independent layer 1 with a shorter live operating record than older networks. That makes liquidity growth and risk monitoring important as users begin supplying collateral, borrowing stablecoins and using GHO on the network.
Aave Becomes Core Monad Infrastructure
For Monad, Aave gives developers and users a lending venue that can support DeFi apps, stablecoin liquidity and future collateral markets. For Aave, the deployment extends its multichain footprint while putting GHO in front of another user base.
Adoption will depend on whether the first year of rewards leads to lasting deposits, borrowing and GHO use on Monad.
