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title: [TEMP CHECK] Deploy Aave Protocol on Monad
Author: @Tokenlogic
Created: 2026-02-24

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Summary

This TEMP CHECK seeks the community’s input on deploying the Aave Protocol on Monad, a fully EVM-compatible, high-throughput network well-suited to supporting high-frequency DeFi applications.

Motivation

Monad’s core differentiator is its pipelined and parallelised EVM execution architecture, enabling significantly higher throughput and lower latency than legacy layer-1 blockchain networks with 400ms block times and 800ms finality, while maintaining full Ethereum compatibility. By processing transactions concurrently rather than sequentially, and by pipelining transaction execution with BFT consensus, Monad unlocks a performance profile particularly well-suited to real-time financial applications.

This technical foundation directly aligns with a key growth vector for the ecosystem: servicing neobanks and fintech platforms that require fast, reliable, and scalable on-chain infrastructure.

Neobanks operating on-chain or integrating DeFi primitives require:

• Low-latency transaction finality

• High throughput under peak demand

• Predictable execution costs

• Battle-tested, proven, reliable liquidity infrastructure

Monad’s architecture addresses the first three requirements through optimised execution and consensus design. Aave addresses the fourth.

By deploying Aave v3.6 or v3.7 on Monad, the Aave Protocol would become a cornerstone liquidity layer supporting:

• On-chain savings and yield products

• Instant credit lines and undercollateralized fintech integrations (where applicable)

• Embedded lending and borrowing services within neobank apps

• Treasury management solutions for fintech platforms

• Stablecoin liquidity infrastructure

Monad’s full EVM compatibility ensures seamless deployment of existing Aave v3 infrastructure without contract rewrites, allowing rapid time-to-market and ecosystem activation. This compatibility also lowers integration friction for fintechs already building within the broader Ethereum ecosystem.

Importantly, as neobanks seek blockchain infrastructure capable of handling consumer-scale transaction volumes, Monad’s high-performance design positions it as a compelling settlement and liquidity layer. Aave’s presence from the early stages of the ecosystem's growth would ensure that lending markets, collateral frameworks, and liquidity pools are natively embedded in the network's financial stack.

Targeting a mid-late March deployment schedule, deploying Aave on Monad would:

• Establish Aave as the primary liquidity engine of the ecosystem

• Enable fintech and neobank partners to build on a robust, battle-tested lending protocol

• Capture early liquidity inflows from institutional and retail participants

• Support scalable, real-time financial products that benefit from Monad’s execution speed

In this context, Aave is intended to serve as a foundational DeFi primitive powering credit, liquidity, and yield infrastructure across Monad’s high-performance ecosystem.

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 at a future date.

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

1. Gather feedback from the community.

2. If consensus is reached on this TEMP CHECK, escalate this proposal to the Snapshot stage.

3. Publication of a standard ARFC, collect community & service providers' feedback before escalating the proposal to the ARFC snapshot stage.

4. 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.