- Aave deployed its V3 lending protocol on Monad on July 2 with 12 supported assets, including USDT0, USDC, and its own GHO stablecoin.
- The Monad Foundation committed US$15 million in incentives over the first 12 months, plus a pledge to acquire and hold 10 million GHO for more than six months.
- Risk assessor LlamaRisk backed the rollout but flagged that Monad’s activity has cooled since launch and that liquidity remains concentrated in established protocols.
Aave has brought its V3 lending markets to Monad in a deployment that pairs a 12-asset launch lineup with its native GHO stablecoin and a multimillion-dollar incentive package, extending the lending protocol’s reach onto one of the newer Ethereum-compatible networks.
The July 2 launch opens lending and borrowing on Monad across USDT0, USDC, GHO, USDe, mUSD, AUSD, WETH, cbBTC, wstETH, weETH, syrupUSDC, and sUSDe. It also marks Aave’s first deployment with Chainlink Smart Value Recapture enabled from day one, a mechanism that redirects part of the value generated during liquidations back to the protocol rather than to external searchers.
The incentives are designed to solve the cold-start problem that new lending markets face, since depositors and borrowers tend to gravitate toward venues that already hold deep liquidity.
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The Monad Foundation is underwriting the move with US$15 million (AU$21.75 million) in incentives across the first 12 months after activation, aimed at drawing liquidity to the new markets.
The foundation also committed to acquire and retain 10 million GHO for more than six months, a direct show of support for Aave’s stablecoin, while the Aave DAO added a further 500,000 GHO in incentives to help seed early adoption.
Concentration Concerns Remain
Not everyone is convinced the momentum will hold. Risk assessor LlamaRisk supported the deployment but attached conservative parameters, citing Monad’s short operating history since its mainnet went live on November 24, 2025.
LlamaRisk noted that early network usage had compressed after a strong start and that liquidity across the ecosystem remained concentrated in a handful of established protocols rather than spread evenly across newer venues. The firm cautioned that incentives can generate liquidity but cannot guarantee retention once the subsidies taper.
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