Aave Eyes Tokenized Equities Hub on Monad Amid DeFi Expansion

Aave is proposing to establish a dedicated lending hub for tokenized equities and cash-equivalent assets on the Monad network, signaling DeFi's move into traditional market assets. The proposal, submitted to Aave's governance forum on September 28, calls for three separate collateral spokes based on asset risk while allowing USDC and USDT0 liquidity to be shared across them.

The proposed structure is designed to keep tokenized assets with different volatility profiles from sharing the same collateral pool. TokenLogic, the proposal's author, said the proposed collateral factors incorporate both annualized volatility and the 99th percentile of historical weekend downside gaps over a five-year period.

Aave is also developing a separate RWA lending market on Avalanche, with Tether's USAT planned as the initial dollar liquidity asset. The proposed market would allow eligible tokenized financial assets to serve as collateral for stablecoin borrowing, although Aave has not disclosed the initial collateral assets or a launch date.