[Temp Check] Deploy Aave V4 on Avalanche

Governance New Market
1

V4_AVAX (2)
V4_AVAX (2)2880×1542 263 KB

Summary

This proposal seeks community feedback on deploying Aave V4 on Avalanche, including a dedicated RWA hub.

Avalanche has committed up to $15M in incentives, tied to growth KPIs, to support Aave V4 growth. Deploying V4 on Avalanche would position Aave as one of the first major lending protocols to bring V4’s Hub and Spoke architecture to a large existing DeFi ecosystem with dedicated launch support.

Motivation

Aave V4 is entering its next growth phase. The initial deployment on Ethereum proved the Hub and Spoke model in production. Expanding into networks with existing DeFi demand, active Aave usage, and a credible path to protocol revenue is the natural next step to growing Aave V4.

Avalanche is a strong candidate for that expansion. Aave already has a live market on the network; V4 would not be entering a new network. Avalanche users are already familiar with supplying, borrowing, incentives, and Aave’s role as a core liquidity venue. The deployment will also include a dedicated RWA hub, extending Aave’s institutional product surface into one of the most active RWA ecosystems in DeFi.

The $15M incentive commitment - tied to V4 growth milestones - gives the deployment a direct growth catalyst from launch. Dedicated ecosystem support will attract liquidity, drive borrow activity, support integrations, and accelerate V4 adoption. V4 would launch into an ecosystem with existing Aave distribution, active DeFi liquidity, and incentives specifically aligned around growing the new architecture. That combination gives Avalanche a credible path to become one of the first major V4 growth markets outside Ethereum.

A successful deployment would expand V4 TVL, increase protocol revenue, attract new integrations, and establish a repeatable expansion model for future V4 deployments built around existing demand and ecosystem support.

Specification

If governance supports this Temp Check, the next phase would prepare an ARFC for deploying Aave V4 on Avalanche.

The ARFC would include the proposed initial Hub and Spoke configuration, supported tokens, oracle configuration, risk parameters, caps, incentives structure, deployment contracts, and any required operational permissions.

Next Steps

Gather community feedback on the proposed Aave V4 deployment on Avalanche.

If feedback is supportive, advance this proposal to ARFC.

Disclaimer

Aave Labs is not receiving compensation from Ava Labs for this proposal or the potential deployment of Aave V4 on Avalanche. Aave Labs is presenting this proposal as a service provider to the Aave DAO under the budget approved by the Aave Will Win framework. Aave Labs is contributing this proposal as part of its approved scope of work in support of DAO operations.

Copyright

Copyright and related rights waived via CC0.

6 Likes
2

Supporting this Temp Check.

A few points worth highlighting from a growth perspective.

Avalanche has been one of Aave V3’s most consistent deployments since launch.

The user base is mature, the main integrations are already in place, and the chain has been building a strong distribution for stablecoins and especially for RWAs.

V4 is entering a ready environment where it inherits an active market and an existing liquidity, which materially reduces execution risk.

The $15M incentive commitment tied to growth KPIs is the right structure.

KPI-linked incentives align both sides on outcomes (TVL, borrow volume, revenue contribution) rather than paying for launch optics. It also gives the DAO a transparent framework to measure execution post-deployment.

Personally, I believe that the dedicated RWA hub is the most strategically relevant part of this proposal. Avalanche is one of the most active institutional and RWA environments in DeFi today, and V4’s Hub and Spoke design is well suited to isolating institutional collateral and risk parameters from the main liquidity pool.

This positions Aave to capture RWA borrow demand at scale without compromising the core market.

If this proposal advances, it also sets a useful template for future V4 expansion: deploy into ecosystems where Aave already has demand and where the host network is willing to back growth with aligned, KPI-based incentives.

Looking forward to community feedback ahead of the ARFC.

2 Likes
3

Thanks for putting this temp check together and for sharing the initial deployment + incentives vision for Aave V4 on Avalanche. I broadly like the direction, especially the idea of pairing a V4 deployment with a dedicated RWA hub on a chain that already has DeFi traction.

At the same time, I feel the two core “selling points” of this temp check – the incentive program (up to 15M) and the RWA hub – are still a bit too high‑level to properly evaluate from a governance and risk perspective. I’d really appreciate some additional clarity on a few points:

  1. Incentives design & accountability

  • When you say “up to 15M in incentives tied to growth KPIs”, could you share more detail on:

    • What are the concrete KPIs you have in mind (TVL, borrows, active users, protocol revenue, integrations, something else)?

    • How will these be measured and by whom, and over what timeframes?

    • What does “up to” mean in practice – is there a base commitment plus performance‑based tranches, or a fully conditional structure?

  • In a downside scenario where the KPIs are not met, what are the guardrails?

    • Do incentives automatically taper/stop, or would that require another governance touchpoint?

    • Is there a plan for periodic public reporting so the DAO can track whether the program is delivering sustainable usage vs just short‑term incentive‑driven spikes?

  1. RWA hub scope & risk framework

  • The idea of a dedicated RWA hub on Avalanche is interesting, but right now the scope feels quite open‑ended.

    • Are there specific RWA verticals or partners you already have in mind, or is this more of a generic “RWA‑ready” deployment?

    • How do you envision eligibility criteria for RWA issuers, whitelisting, and ongoing monitoring (especially around legal, credit, and operational risks)?

  • It would help a lot to understand how this proposed RWA hub relates to existing or planned RWA efforts on Ethereum for example, are there shared standards, oracles, or risk methodologies you intend to reuse, so that the DAO is not managing completely fragmented frameworks across chains?

  1. High‑level risk and rollout guardrails
    Even at the temp check stage, it might be useful to outline some initial design guardrails, such as:

  • Starting with a conservative, blue‑chip asset set and tight caps, then expanding based on observed performance.

  • A rough phased rollout (e.g., guarded launch → monitored expansion → full rollout) and an initial review window (e.g., after 6–12 months) to reassess incentives, parameters, and RWA scope.

Overall, I’m supportive of exploring Aave V4 on Avalanche with a strong growth and RWA thesis, but I think the DAO would benefit from a bit more specificity around incentives design, measurement/accountability, and the RWA risk framework before moving to the next stage. Any additional detail you can share on these fronts would make it much easier for delegates to form a well‑informed view.