Aave deploys V4 on Avalanche in first expansion beyond Ethereum

Jul 15, 2026

Lending protocol Aave has deployed its V4 system on Avalanche, its first expansion beyond Ethereum. The move introduces Aave's 'Hub & Spoke' architecture to support the growing market for tokenized real-world assets (RWAs), which now exceeds $34 billion. While Aave aims to capture $1 billion in RWA deposits, the V4 rollout follows the departure of key governance and risk management partners.

Aave V4 Avalanche deployment

▪The deployment is supported by a $15 million incentive from Avalanche, which is tied to key performance indicators for growth.
▪Aave has deployed its V4 lending protocol on the Avalanche blockchain, its first expansion beyond Ethereum.
▪Aave is one of the largest decentralized lending protocols, with approximately $14 billion in total value locked across all chains.
▪The Aave Chan Initiative (ACI), a major governance service provider, announced it would wind down operations due to "structural governance problems."
▪Aave first launched on the Avalanche network in 2021 and has since processed over $15 billion in inflows across its V2 and V3 versions.
▪Risk management firm Chaos Labs left the Aave protocol in April 2026, citing disagreements over V4's new architecture.
▪Aave first deployed V4 on Ethereum on March 30, 2026, after more than two years of development.

Hub & Spoke architecture

▪Aave V4 introduces a "Hub & Spoke" architecture designed to separate risk across different liquidity hubs and lending markets.
▪The initial Avalanche deployment includes a Core Liquidity Hub and three markets: a main market, an AVAX Correlated market, and a forex market.
▪The Hub & Spoke model allows specialized lending markets to have unique collateral rules while drawing on shared liquidity.

Tokenized asset collateral markets

▪Aave founder Stani Kulechov expects Aave to capture $1 billion in RWA deposits.
▪A dedicated market for borrowing against tokenized assets like U.S. Treasuries and corporate bonds is planned but not yet live.
▪The V4 deployment on Avalanche is intended to support future lending markets for tokenized real-world assets (RWAs).

Institutional tokenization infrastructure

▪Avalanche has positioned itself as a blockchain network for institutional finance and tokenized assets.
▪The deployment coincides with financial institutions building infrastructure to use tokenized assets as collateral.

Real-world asset tokenization growth

▪Aave founder Stani Kulechov predicts the total market for tokenized real-world assets will reach $100 billion by the end of 2026.
▪The value of tokenized real-world assets on public blockchains has grown to over $34 billion from $12.8 billion in the past year, per RWA.xyz.