Aave launches V4 on Avalanche in first expansion beyond Ethereum

Aave has deployed Aave V4 on Avalanche in the protocol’s first expansion beyond Ethereum, introducing a structure in which multiple lending markets can share liquidity while maintaining separate risk management. The rollout supports AVAX, USDC, USDT, BTC.b, WETH.e and EURC. The deployment uses a core-branch architecture built around one core liquidity hub and three markets covering main, AVAX-related and forex activity. The design is intended to let specialized markets operate with their own collateral and risk settings without fragmenting liquidity across isolated pools. The launch builds on Aave’s earlier presence on Avalanche through V3 and aligns with founder Stani Kulechov’s plan to bring tokenized real-world assets into the protocol. Aave has previously said planned use cases for V4 on Avalanche include lending against tokenized U.S. Treasuries, money market funds, private credit and corporate bonds, with one of the first Avalanche-based markets expected to let institutions borrow against tokenized collateral through the protocol’s liquidity network. Recent developments tied to that strategy include Aave’s broader use of Chainlink’s Cross-Chain Interoperability Protocol across its app and Stable Vaults, as well as Bridgetower’s July 13 announcement that it tokenized more than $11 billion in production assets on Avalanche using Chainlink infrastructure. Aave founder Stani Kulechov has said Avalanche’s established Aave market and expanding tokenization ecosystem made it a suitable first destination for V4 outside Ethereum, while Ava Labs President John Wu said tokenization is increasingly being used to activate assets rather than simply represent them on-chain.