Aave has deployed its V4 lending protocol on a public blockchain outside Ethereum for the first time, with Avalanche as the live network. The focus of this launch is not retail lending, but rather an institutional credit market centered on tokenized real-world assets. Following the announcement, the AAVE price continued to weaken in line with the broader crypto market and did not strengthen due to the product launch.
Deploy V4 outside Ethereum for the first time
Aave stated that Avalanche is the first network outside Ethereum to deploy V4. The new version introduces a Hub and Spoke architecture, allowing different lending markets to set their own collateral ranges and risk parameters while continuing to connect to shared liquidity pools.
The goal of this design is to allow lending markets for specific asset types to operate independently, without fully segregating liquidity into entirely separate pools. For institutional use cases, this means the protocol can establish more granular market structures for different assets.
RWA lending becomes a new priority
Aave plans to expand a multi-asset tokenized lending market on Avalanche, covering:
- Tokenized U.S. Treasury Bonds
- Money market fund
- Private credit and corporate bonds
According to the project team, one of the first markets will allow institutions to borrow using tokenized collateral while integrating with the protocol’s existing liquidity network. This also highlights Aave’s strategic focus on RWA lending as a key direction for its V4 expansion.
Aave founder Stani Kulechov said that Avalanche already has a more mature Aave market, and its tokenized asset ecosystem is growing, making it well-suited as the first external network for V4 expansion. He noted that one of the earliest markets planned on Avalanche was centered around lending and borrowing against tokenized assets.
Avalanche has recently increased its investment in tokenization infrastructure.
This deployment is also related to Avalanche’s recent initiatives in cross-chain and tokenization. Previously, Aave expanded its use of Chainlink’s Cross-Chain Interoperability Protocol (CCIP) as the default cross-chain infrastructure for Aave App and Stable Vaults.
According to Aave, CCIP currently supports functions such as token transfers, vault management, governance execution, GHO stablecoin transfers, and governance message passing. The unified interoperability layer helps the protocol expand into new markets in a multi-chain environment.
Additionally, on July 13, Bridgetower announced that it had tokenized over $11 billion in real-world production assets on Avalanche, leveraging Chainlink infrastructure, including the Arizona Copper-Gold project. According to the report, this transaction also propelled Avalanche to fifth place in net real-world asset inflows on RWA.xyz.
AAVE price remains under pressure
Despite new developments from the product launch, AAVE's short-term performance has not shown significant improvement. Data in the article shows AAVE trading at $96.66, with a decline of over 2% in the past 24 hours, continuing its downward trend from the past week.
This indicates that protocol upgrades and ecosystem advancements have temporarily failed to offset the broader market pressure caused by Bitcoin’s volatility. However, from a product perspective, Aave has begun transitioning V4 from a single-chain Ethereum deployment to a multi-chain expansion targeting institutional and RWA use cases.