Decentralized finance (DeFi) platform Aave has deployed its V3 lending protocol on Monad, expanding its Layer 1 blockchain lending ecosystem to support 12 assets at launch.
On Thursday, Aave announced that the initial marketplace supports USDT0, USDC, Aave’s GHO stablecoin, USDe, mUSD, AUSD, WETH, cbBTC, wstETH, weETH, syrupUSDC, and sUSDe. This is also the first Aave deployment with Chainlink Shrewd Value Recapture enabled from day one, allowing a portion of the value generated from liquidation to be redirected back to the protocol.
The rollout expands Aave’s multi-chain lending network while providing Monad users and developers with access to an established lending marketplace, Aave’s GHO stablecoin, and liquidity incentives designed to support early adoption.
Monad is compatible with the Ethereum application environment, allowing existing Solidity contracts and Ethereum tools to be used with minimal changes. According to to the Aave management proposal.
Total Monad value locked as of Thursday. Source: DefiLlama
The Aave rollout tests Monad’s liquidity ambitions
Aave’s governance documents show that the Monad Foundation committed $15 million in incentives in the first 12 months after activation. The foundation also agreed to acquire and retain 10 million GHO for over six months, while the Aave DAO committed another 500,000 GHO in incentives to support adoption on the Monad platform.
These incentives could aid provide initial liquidity. However, user activity will need to continue as incentives decline. According to A risk assessment by LlamaRisk Monad mainnet launched on November 24, 2025, and as of June 8 had a total value locked of approximately $359.5 million. It found that early network utilization decreased after a sturdy start, and fluency remained focused on established protocols.
LlamaRisk supported implementation with conservative starting parameters, citing Monad’s compact operational history.
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The launch also comes at a time when institutions are increasingly considering introducing tokenized assets to DeFi lending markets. In June, Standard Chartered said tokenized assets flowing into DeFi could funnel deposits to Aave, whose deposit base reached about $75 billion at its peak in October 2025.
In April, Centrifuge revealed plans to contribute tokenized AAA-rated treasury bonds, private loans and collateralized loan obligations to Monad for utilize in its lending, collateral and secondary market activities.
While Centrifuge has not announced that its assets will be integrated with Aave, the implementation will give Monad an established lending platform that can support tokenized assets as its ecosystem grows.
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