Aave launches V4 on Avalanche, laying groundwork for tokenized credit markets
Aave has launched V4 on Avalanche, its first expansion beyond Ethereum, and a move toward lending markets backed by tokenized real-world assets. The new Hub & Spoke design lets separate markets set their own collateral rules and risk parameters while sharing liquidity across the protocol. Aave says an early Avalanche market will enable borrowing against tokenized assets, and future markets could accept tokenized Treasurys, money market funds, private credit, and corporate bonds. The rollout comes amid rapid growth in tokenized collateral infrastructure across traditional finance and DeFi. Institutions and market infrastructure firms are building tools to use tokenized assets as collateral, while the broader RWA sector has grown to over $34 billion on public blockchains.
