Greetings, Aave community!
Aave Labs has continued to make steady progress on multiple protocol endeavors in line with its service provider scope.
The below summary highlights developments in the Aave Protocol and reflects Aave Labs’ transparent and collaborative approach of building in public, welcoming community feedback, and fostering auditability through open-source principles.
July update:
- Launched Aave V4 on Avalanche and completed preparation for the Maple syrupUSDG Spoke on Ethereum, with its AIP created for execution on August 1st.
- Published Certora’s formal verification reports for Aave V4.
- Launched Aave V3 on Monad and onboarded stcUSD to Aave V3 MegaETH.
- Advanced portfolio discipline, deprecating legacy V3 reserves, matured Pendle PTs, and oracle feeds for rarely used assets.
- Updated Aave V3 LTV and E-Mode parameters in support of LlamaRisk.
- Deployed the Remote GSM on Arbitrum and launched GHO in Monad.
- Launched Stable Vaults as a core component of the Aave App and the Aave Kit.
- Passed the Aave App Launch ARFC and advanced Android features.
- Grew Aave Horizon deposits and launched its public maintenance thread.
- Advanced Aave Pro and Aave Interface improvements, including gasless voting.
Aave Protocol
Security remained a central focus throughout the month, with continued engagement from the internal security team and Aave Labs’ security partners.
Aave V4
Aave V4 crossed $325M in deposits during July, another all-time high, with deposits nearly doubling over the month. Aave V4 also went live on Avalanche in July, marking its first expansion across multiple chains beyond Ethereum. The team also completed preparation work for the Maple syrupUSDG Spoke on Ethereum during the month, with the corresponding AIP created for execution on August 1st.
On the security side, Certora published its formal verification reports for Aave V4. The reports reflect the ongoing security effort carried out throughout the protocol’s development, which produces a formal list of properties against which the code is verified, providing mathematical assurance that the code behaves as intended under the modeled conditions and extending the assurance layer beyond audits.
Implementation of the Risk Steward for Aave V4 also progressed toward activation. The Risk Steward lets a Risk Council apply frequent, routine risk-parameter adjustments within bounds set by governance, without requiring a full governance vote each time, following the same model established by the Aave V3 Risk Steward. Related to this effort, and in support of @LlamaRisk, the team also implemented regular supply and borrow cap increases on Aave V4, aimed at keeping capacity aligned with market growth.
The team is working closely with the Babylon team on the Bitcoin vaults integration (Babylon TBV) proposed in this temp check, executing the design, integration, and audit reviews of Babylon’s implementation. The integration brings a new use case for BTC within the Aave Protocol, letting native Bitcoin serve as collateral without wrapping, bridging, or custodians.
Aave V3
Aave V3 launched on Monad, one of the EVM networks with the highest throughput. Following the technical assessment published previously, stcUSD was also onboarded to Aave V3 MegaETH.
In support of @LlamaRisk, an Aave V3 LTV and E-Mode update was executed, reducing loan-to-value ratios to zero for a small set of assets with low liquidity across several markets, introducing a new stablecoin eMode category on Mantle, and raising wstETH borrow caps on Ethereum Core and Prime.
The team also worked closely with @LlamaRisk on a portfolio discipline effort. In July, two governance proposals went live applying the Aave Risk Framework at portfolio level, deprecating V3 reserves with minimal activity and matured Pendle principal tokens (representing approximately $85M supplied), and retiring oracle feeds for rarely used assets across V2 and V3 where continued maintenance is no longer justified. Core stablecoin and bluechip markets are unaffected: the deprecated positions are wound down gradually, and no forced action is taken against existing positions.
Governance Proposals
Aave Labs actively supported the DAO’s governance efforts throughout July, bringing AIPs onchain during the month, including the Aave V3 Monad activation and the Aave V3 LTV and E-Mode update. The AIP for the Maple syrupUSDG Spoke onboarding on Ethereum was also created in July, with execution set for August 1st. These proposals, alongside others such as the PAXG onboarding and the Aave App Launch, were shaped through ARFC discussion and Snapshot voting as a collaborative effort with the DAO.
Beyond its own proposals, the team continued to support fellow service providers throughout their proposal efforts. A consolidated view of recent proposal activity is available on the voting dashboard.
Asset Technical Assessments
The team published the technical assessment of PAXG and the technical assessment of syrupUSDG, both on Aave Ethereum. Work is also underway on a number of additional assessments, to be published in the coming weeks.
What else are we working on?
Stable Vaults
In July, Aave Labs introduced Stable Vaults, a backend for embedding stablecoin yield at a fixed rate into any product. The architecture separates an accounting chain, which handles rate management and record-keeping, from earning chains, where deposits are deployed across multiple yield strategies and networks simultaneously. Access is governed through allowlisting, with permissions assigned by role, and each integrating platform configures rates for each user and controls the allocation of revenue generated above the committed rate.
Stable Vaults let businesses accept USDC, USDT, GHO, or their own stablecoin as deposits. Once received, deposits are treated as interchangeable, and withdrawals can be made in any supported stablecoin regardless of the asset originally deposited. Underlying yield strategies route into Aave markets, Savings GHO, or any ERC-4626 compliant vault.
Stable Vaults is a core component of the Aave App and is now part of the Aave Kit. For GHO, the product opens a new distribution channel: businesses that integrate Stable Vaults can route deposits into Savings GHO, extending GHO’s utility and reach beyond direct protocol usage.
GHO
GHO’s backing strength continued to improve, reaching 245% total backing against 601M total supply and $552M total reserves. GHO was also listed on Monad alongside the V3.7 deployment, and a Remote GSM was deployed on Arbitrum, extending the GHO Stability Module (GSM) to a new network. In support of @TokenLogic, 8M GHO were acquired for the Prime instance, expanded the MainnetSwapSteward to swap into GHO, AAVE, and wETH, and granted GHO deployment permissions on Monad. The StkGhoMigrator was also launched, giving stkGHO holders a direct path to migrate into sGHO.
Aave App
The Android app continued advancing toward feature parity with iOS, covering onboarding, trays, animations, and design system alignment. Preliminary testing started for both iOS and Android versions during the month. Separately, the governance proposal formally supporting the Aave App launch passed in July.
Aave Horizon
Aave Horizon continued its growth trajectory, with deposits reaching $358M during the month. In support of @LlamaRisk, the price feeds for RLUSD and USDC on Aave Horizon V3 were updated to price cap adapters (CAPO), aligning with the approach already applied to other assets across the protocol. The team also launched a dedicated, running maintenance thread to consolidate onchain and offchain Aave Horizon updates, including listings, parameter changes, integrations, and operational milestones, in one transparent place.
Aave Pro
Aave Pro shipped a UI update to support Aave V4 usage across chains, letting users view assets, balances, and positions on each of them, timed to the Avalanche launch. ETH and WETH handling was also cleaned up: the two are now combined in the UI, the redundant “convert to WETH” toggle was removed, both balances are shown on the asset page, and WETH was removed from the deposit explore page. Assets can also be grouped by hub or market, with the option to collate them across views.
Aave Interface
The team shipped a governance page refactor, adding a payloads panel to proposals that surfaces payload state, actions, the Seatbelt report, and explorer links. The update corrected timeline timestamps with live countdowns for the next action, added actionable transaction links, and properly handled expired and canceled states.
Gasless voting was also built, replacing the Gelato relay path with Aave’s own relayer for voting. Bug fixes, dependency upgrades, and UI improvements to guide users to try Aave V4 were also rolled out during this month.
Aave Kit
The SDK was improved to support overriding token names, Hubs, and Spokes in a local instance. The team also added support for custom headers, enabling more use cases where they are required for custom instances.
What’s coming next?
Our main focus for the coming month will be:
- Execute the Maple syrupUSDG Spoke onboarding.
- Advance the Babylon TBV integration with the Babylon team.
- Advance Aave App launch preparations following passage of the Launch ARFC.
- Continue supporting GHO growth, including adoption of Stable Vaults.
- Continue Aave Pro and Aave Interface improvements.
- Implement leverage support in Aave Pro.
- Implement position swaps (collateral swap, debt swap, and repay with collateral) in Aave Pro.
Stay tuned for next month’s update.
Aave Labs