Aave V4 Launches on Avalanche in First Expansion Beyond Ethereum

Aave has taken its V4 lending protocol beyond Ethereum for the first time, choosing Avalanche for its next growth phase. The launch is aimed at building dedicated credit markets for tokenized real-world assets and institutional finance.

Aave V4 Expands Beyond Ethereum

Aave V4 is now live on Avalanche, marking the protocol’s first deployment outside Ethereum. The move extends the platforms lending infrastructure to a network already used for decentralized finance, tokenization, and institutional blockchain applications.

The launch builds on an earlier presence on Avalanche, where Aave V3 has handled billions of dollars in liquidity. Aave said the V4 deployment will support specialized borrowing markets backed by tokenized assets.

Aave V4 uses a Hub and Spoke design that can support shared liquidity and custom risk settings. The structure allows different markets to use dedicated collateral rules while still connecting to wider liquidity.

Avalanche RWA Growth Adds Context

As reported by CoinGape, Avalanche’s latest RWA growth followed a July 13 announcement from Bridgetower. The firm tokenized more than $11 billion in real-world production assets, including the Arizona Copper-Gold project, on Avalanche using Chainlink infrastructure.

That transaction helped push Avalanche to fifth place in net RWA inflows on RWA.xyz overnight. The activity added fresh context to Aave’s decision to choose Avalanche for its first V4 expansion beyond Ethereum.

According to the announcement, the platform can support tokenized US Treasuries, money market funds, private credit, and corporate bonds. One planned market on Avalanche will allow institutions to borrow against tokenized collateral through Aave’s liquidity network.

Aave Targets Tokenized Credit Markets

The founder, Stani Kulechov, said Avalanche was selected because of its existing Aave market and growing tokenization activity. He said, “Aave V4 was designed to enable new credit markets at internet scale.”

Kulechov added that Avalanche offers a strong base for tokenized asset lending. He said one of the first planned markets on Avalanche will focus on borrowing against tokenized assets.

Ava Labs President John Wu said tokenization is moving beyond bringing assets onchain. He said,

“The next phase of tokenization is about putting assets to work, not just bringing them onchain.”

The Avalanche launch is also expected to guide future Aave V4 deployments across other networks. Aave plans to tailor each rollout to the strengths of the selected blockchain ecosystem.

Despite the launch, the AAVE price has fallen over 3% in 24 hours to $96.86, after a week of bearish pressure caused by the fluctuating Bitcoin price trend.

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