Aave just deployed its V3 lending protocol on Monad. That’s 12 assets ready at launch — USDT0, USDC, Aave’s own GHO stablecoin, USDe, mUSD, AUSD, WETH, cbBTC, and more.
It’s also the first Aave deployment with Chainlink’s Smart Value Recapture enabled from day one. That means a slice of liquidation value flows back to the protocol instead of vanishing.
The Monad Foundation isn’t messing around. They’ve committed $15 million in first-year incentives and agreed to acquire and keep 10 million GHO for over six months. Aave’s DAO added another 500,000 GHO on top.
Here’s the question though — will liquidity stick around after the incentives dry up? LlamaRisk ran the numbers. Monad’s mainnet launched November 2025 and had about $359.5 million locked as of June. Early usage cooled after a hot start, and liquidity is still concentrated in established protocols. LlamaRisk backed the deployment but with conservative parameters, noting Monad’s short track record.
Still, the timing is interesting. Standard Chartered recently suggested tokenized assets flowing into DeFi could drive deposits into Aave — whose deposit base hit $75 billion at its October 2025 peak. And Centrifuge already announced plans to bring tokenized Treasurys and private credit to Monad.
Aave’s multichain network keeps expanding, and Monad users get access to one of DeFi’s biggest lending markets. The pieces are there. Now we see if they fit.
