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, slopesupdateGhoSupplyCap: 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.