Woofun AI reports that Aave deployed its V3 lending protocol on Monad on Thursday, introducing support for 12 assets including USDT0, USDC, GHO, USDe, mUSD, AUSD, WETH, cbBTC, wstETH, weETH, syrupUSDC, and sUSDe. This marks the first Aave deployment to enable Chainlink Smart Value Recapture from day one, redirecting liquidation value back to the protocol. The expansion provides Monad users with immediate access to an established borrowing market while integrating Aave's GHO stablecoin and liquidity incentives designed to accelerate early adoption.

Structurally, Monad's compatibility with Ethereum's application environment allows existing Solidity contracts and tooling to function with minimal modification. The Monad Foundation committed $15 million in incentives over the first 12 months following activation to bolster liquidity.

Additionally, the foundation agreed to acquire and retain 10 million GHO for over six months, while the Aave DAO pledged a further 500,000 GHO in incentives to support network growth.

Per Woofun AI, risk assessment data from LlamaRisk indicates that Monad's mainnet launched on Nov. 24, 2025, and held approximately $359.5 million in total value locked as of June 8. The report noted that early network usage compressed after a strong start, with liquidity remaining concentrated in established protocols. Consequently, LlamaRisk supported the deployment only with conservative initial parameters due to the chain's short operating history.

The launch coincides with growing institutional interest in integrating tokenized assets into DeFi lending markets. In June, Standard Chartered stated that tokenized assets entering DeFi could drive deposits into Aave, whose deposit base peaked at about $75 billion in October 2025. Earlier in April, Centrifuge revealed plans to bring tokenized Treasurys, private credit, and AAA-rated collateralized loan obligations to Monad for use in lending, collateral, and secondary-market activity.

Although Centrifuge has not confirmed direct integration of its assets into Aave, the deployment establishes a critical lending venue on Monad capable of supporting tokenized assets as the ecosystem matures.