[ARFC] Deploy Aave Protocol on Monad

title: [ARFC] Deploy Aave Protocol on Monad Author: @Tokenlogic Created: 2026-05-19 Summary This ARFC proposes deploying Aave Protocol v3.7 on the Monad Network. Motivation Monad’s pipelined EVM architecture delivers fast, high-throughput performance while remaining fully compatible with Ethereum, making it ideal for real-time financial applications. This directly supports the needs of neobanks and fintech platforms, which rely on quick transaction finality, scalability, and predictable costs. By deploying Aave v3 on Monad, the ecosystem gains a proven liquidity layer that enables lending, borrowing, yield generation, and stablecoin infrastructure. Because of Monad’s full EVM compatibility, Aave can be integrated quickly with minimal changes, making it easier for existing Ethereum builders to adopt. Together, these positions Aave as the core liquidity engine within Monad, helping attract early users and capital while supporting the next generation of scalable, on-chain financial products. Incentives Package Monad Foundation will provide the following within the first twelve months of the Aave Protocol activation proposal being executed: $15M USD in incentives measured at the block when ACI distributes rewards via MASIv infrastructure 10M units of GHO will be acquired and retained for more than 6-months whilst respecting considerations for managing operating capital The Aave DAO will provide the following within the first twelve months of the Aave Protocol activation proposal being executed: 0.50M units of GHO incentives to be distributed to support the growth and adoption of GHO on the Monad network The Monad Foundation reserves the right to determine whether and when to migrate to Aave v4. Post Growth Roadmap After the initial launch of Aave Protocol v3.7, the next phase of growth is expected to evolve with the introduction of Pendle PT assets and Fastlane’s LST. Pendle PT-AUSD Pendle PT-sUSDe Pendle PT-reUSD Fastlane’s shMON Specification The below will be updated upon receiving feedback from various stakeholders in the lead-up to the deployment. General Configuration Parameters Value Value Value Value Value Value Value Value Value Value Value Value Asset USDT0 USDC GHO USDe mUSD AUSD wETH wBTC wstETH syrupUSDC sUSDe wMON Isolation mode No No No No No No No No No No No No Borrowable Yes Yes Yes Yes Yes Yes No No No No No No Collateral enabled Yes Yes Yes No No No Yes Yes Yes No No No Supply Cap 100,000,000 75,000,000 20,000,000 60,000,000 100,000,000 20,000,000 40,000 10,000 35,000 40,000,000 60,000,000 20,000,000 Borrow Cap 100,000,000 50,000,000 18,000,000 50,000,000 50,000,000 18,000,000 36,000 - - - - - Debt Ceiling - - - - - - - - - - - - LTV 75.00% 75.00% 75.00% - - - 80.50% 73.0% 75.00% - - - LT 78.00% 78.00% 78.00% - - - 84.00% 78.00% 78.00% - - - Liquidation Bonus 7.50% 7.50% 7.50% - - - 5.50% 7% 6.00% - - - Liquidation Protocol Fee 5% 5% 5% - - - 5.5% 5.5% 6% - - - Variable Base 0.0% 0.0% 0.0% 0.0% 0.0% 0.0% 0.00% - - - - - Variable Slope1 4.0% 4.0% 4.0% 4.0% 4.0% 4.0% 2.20% - - - - - Variable Slope2 40.0% 40.0% 40.0% 40.0% 40.0% 40.0% 20.0% - - - - - Uoptimal 90.0% 90.0% 90.0% 90.0% 80.0% 90.0% 90.0% - - - - - Reserve Factor 10.0% 10.0% 10.0% 35.0% 10.0% 10.0% 15.0% 7.0% 5.0% 10.0% 10.0% 10.0% Stable Borrowing Disabled Disabled Disabled Disabled Disabled Disabled Disabled Disabled Disabled Disabled Disabled Disabled Flashloanable Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Yes Siloed Borrowing No No No No No No No No No No No No Borrowed in Isolation No No No No No No No No No No No No E-Modes 1, 2, 3 1, 2, 3 1, 2, 3 1, 2, 3 1, 2, 3 4 4 1 2 3 eMode #1 - Maple syrupUSDC Parameter Value Value Value Value Value Asset syrupUSDC USDT0 USDC GHO AUSD Collateral Yes No No No No Borrowable No Yes Yes Yes Yes Max LTV 90.00% - - - - Liquidation Threshold 92.00% - - - - Liquidation Bonus 4.00% - - - - eMode #2 - Liquid Leverage Parameter Value Value Value Value Value Value Asset sUSDe USDe USDT0 USDC GHO AUSD Collateral Yes Yes No No No No Borrowable No No Yes Yes Yes Yes Max LTV 90.00% 90.00% - - - - Liquidation Threshold 92.00% 92.00% - - - - Liquidation Bonus 4.00% 4.00% - - - - eMode #3 - MON/stablecoins Parameter Value Value Value Value Value Asset wMON USDT0 USDC USDe AUSD Collateral Yes No No No No Borrowable No Yes Yes Yes Yes Max LTV 50.00% - - - - Liquidation Threshold 55.00% - - - - Liquidation Bonus 10.00% - - - - eMode #4 - Lido Yield Maximiser Parameter Value Value Asset wstETH wETH Collateral Yes No Borrowable No Yes Max LTV 93.00% - Liquidation Threshold 93.00% - Liquidation Bonus 0.00% - CAPO Asset maxYearlyRatioGrowthPercent ratioReferenceTime MINIMUM_SNAPSHOT_DELAY syrupUSDC Monthly 7 syrupUSDT 8.45% Monthly 7 sUSDe 15.19% Monthly 14 Aave DAO’s Contribution Create an allowance for 0.5M aEthLidoGHO from Aave V3 Prime on Ethereum: Asset: aEthLidoGHO: 0x18eFE565A5373f430e2F809b97De30335B3ad96A Amount: 0.5M Spender: AFC 0x22740deBa78d5a0c24C58C740e3715ec29de1bFa Method: approve() aEthLidoGHO on the Aave Collector contract to the Aave Finance Committee (AFC) address. GHO Stablecoin Activate GHO Lane Currently, the CCIP Bridge to Monad Network is v1.5 and requires upgrading to v1.6 before GHO lanes are established. TokenLogic will work with Chainlink to sync upgrade timelines and extend the new GHO lanes to/from the Monad Network Current CCIP Bridge Configuration, which may change prior to implementation. The Gho Lane Activation uses the parameters in effect when the AIP is submitted. Bucket Capacity: 100M GHO Inbound Capacity: 1.5M GHO Outbound Capacity: 1.5M GHO Refill Rate: 300 GHO/sec The table below lists the address of the new Monad deployments Contract Address GhoToken TBA closer to launch GhoTokenPool TBA closer to launch GhoBucketSteward TBA closer to launch GhoCcipSteward TBA closer to launch GhoAavecoreSteward TBA closer to launch Deploy GHO Stewards GhoAaveSteward updateGhoBorrowCap: ±100% updateGhoBorrowRate: ±5% on optimal usage ratio, base variable rates, slopes updateGhoSupplyCap: Up to +100% GhoGsmSteward updateGsmExposureCap: ±100% updateGsmBuySellFees: ±0.5% per side (FixedFeeStrategy) Both stewards remain callable only by the GHO steward protocol. GhoCcipSteward updateBridgeLimit : ±100% updateRateLimit: ±100% GhoBucketSteward updateFacilitatorBucketCapacity : ±100% Deploy stataUSDT0 remoteGSM Parameter Value GHO Bucket Cap 50M GHO stataUSDT0 Exposure Cap 40M Freeze Lower Bound $0.990 Freeze Upper Bound $1.010 Unfreeze Lower Bound $0.995 Unfreeze Upper Bound $1.005 Mint GHO Fee 0% Burn GHO Fee 0.10% USDT0 deposits into stataUSDT0 trigger GHO transfers using Ethereum-held inventory via GSM. 3. Mint and bridge 50,000,000 GHO Mint 50M GHO from the GhoDirectFacilitator and bridge to Monad via CCIP to Monad’s Collector. Parameter Value Facilitator 0x2bd010Ab5393AB51b601B99C4B33ba148d9466e9 GhoReserve (Ethereum) 0x54C58157DeF387A880AE62332D1445f03adbE7E9 Mint Amount 50,000,000 GHO New Facilitator Bucket Level 150,000,000 GHO (100% of capacity) 4. Fund GhoReserve from Collector From Collector, transfer to GhoReserve deployed on Monad to be used by GSM. Parameter Value Source Chain Ethereum Destination Chain Monad (CCIP selector: ) GHO CCIP Token Pool (Ethereum) 0x06179f7C1be40863405f374E7f5F8806c728660A GHO CCIP Token Pool (Plasma) 0x360d8aa8F6b09B7BC57aF34db2Eb84dD87bf4d12 Destination (Plasma GSM) 0x6aC541605b0317dE076C9FeC2842902c844dEa74 Amount 50,000,000 GHO Additionally, after a trial period with a maximum bridge amount of 1.5M across any networks, and a refill rate of 300 GHO per second, we are increasing the amounts to a maximum bridge amount of 5.0M and a refill rate of 1,000 GHO per second. Disclosure TokenLogic is an active service provider to the Aave DAO, the beneficiary of stream 100072 and the KPI as outlined in this publication. The scope of this engagement is available via this forum proposal. TokenLogic supports and maintains an independent delegate voting platform within the Aave community. TokenLogic and associated entities have no undisclosed material conflicts of interest at the time of submission. Next Steps Gather feedback from the community. If consensus is reached on this TEMP CHECK, escalate this proposal to the Snapshot stage. Publish a standard ARFC, collect feedback from the community & service providers before escalating the proposal to the ARFC snapshot stage. If the ARFC snapshot outcome is YAE, publish an AIP vote for final confirmation and enforcement of the proposal. Copyright Copyright and related rights waived via CC0. 1 post - 1 participant Read full topic