Aave is the largest decentralized lending and credit protocol in DeFi.

Built on transparent blockchain smart contracts, it lets users deposit crypto or stablecoins to earn yield, and borrow instantly against that collateral, without banks, paperwork or fixed hours.

The protocol runs entirely onchain and is available 24/7 to any compatible wallet, from individual DeFi users to DAOs, funds, fintechs and a growing base of regulated institutions. Aave also issues GHO, a decentralized, overcollateralized stablecoin native to its ecosystem.

In March 2026, Aave launched V4 on Ethereum mainnet, introducing a hub-and-spoke architecture. Three shared liquidity hubs, Core, Prime and Plus, provide a common pool of capital that specialized markets can draw on, while each market sets its own risk parameters, collateral types and features, including fixed-rate lending and tokenized real-world assets.

By separating liquidity from market design, V4 lets Aave support individualized lending markets without fragmenting its deep, shared liquidity pool. That makes the protocol a flexible foundation for the next generation of onchain credit, from regulated stablecoins like USDG to institutional tokenized assets.

Why Aave Joined Global Dollar Network

Aave's growth increasingly depends on deep, high-quality dollar liquidity. As the protocol expands into institutional lending and tokenized real-world assets, it needs stablecoins that institutions can trust as much as the credit infrastructure they run on.

USDG is fully reserved and redeemable one-to-one for US dollars. It is issued by Paxos Digital Singapore, a Major Payments Institution supervised by the Monetary Authority of Singapore, and by Paxos Issuance Europe Oy under the supervision of Finland's Financial Supervisory Authority, in compliance with the EU's Markets in Crypto-Assets regulation (MiCA). Reserves are held in segregated, bankruptcy-remote accounts and independently attested monthly.

That regulatory foundation fits closely with the direction Aave is heading. By integrating USDG, Aave users gain another trusted dollar to supply and borrow, while USDG holders get access to DeFi's deepest lending market. The partnership connects a regulated stablecoin with permissionless, transparent credit infrastructure.

How Aave is Using USDG

Supplying and borrowing on Aave V4

USDG is live on Aave V4 and accessible through Aave Pro. Users connect a wallet, select USDG and either supply it to earn yield or borrow against eligible collateral, where enabled.

Supplying USDG takes a single action. Depositors receive an interest-bearing aToken that accrues yield in real time and can be redeemed at any time, since liquidity is available around the clock. Rates adjust automatically with market utilization, and supply-side incentives for USDG depositors have run as high as roughly 6.4% at launch.

Because V4 shares liquidity across the Core, Prime and Plus hubs, USDG can plug into markets with different risk profiles and features, from standard money-market lending to more tailored institutional strategies, all drawing on the same underlying pool.

Adoption has moved quickly since USDG listed on Aave in late December 2025. As of June 2026, net USDG supplied stood at roughly $50.5 million, with about $41.5 million borrowed against it, a utilization rate near 82%. The base has grown broad as well as deep: 828 unique suppliers and 170 unique borrowers to date, with roughly $316 million in cumulative USDG deposited and about $163 million borrowed across some 2,080 supply transactions.

Aave Horizon: institutional real-world-asset lending

Aave Horizon is Aave Labs' dedicated market for institutional adoption of tokenized real-world assets. Launched on Ethereum mainnet in 2025, it is a separate instance of the Aave protocol and today the largest RWA lending market for regulated, permissioned assets.

Qualified, issuer-approved institutions supply tokenized securities and other real-world assets as collateral and borrow stablecoins against them 24/7, with compliance rules enforced at the token level by the issuers themselves. Collateral is permissioned by issuers, but the stablecoin liquidity side is open: anyone can supply and earn yield from RWA-backed borrowers, yield that is uncorrelated to crypto markets.

A regulated, fully reserved dollar like USDG fits naturally into that stablecoin liquidity side, giving USDG holders access to real-world-asset-backed yield and institutions another trusted dollar to borrow against tokenized collateral. As Horizon migrates to Aave V4 this year and unlocks a broader set of collateral types and segregated risk profiles, that opportunity is set to grow.

Scaling a Regulated Dollar Across the Next Generation of Onchain Credit

The near-term opportunity is scaling USDG across V4's hub-and-spoke architecture, most notably with its launch of the Global Dollar Hub, the first new Liquidity Hub since V4's launch, live on Ethereum and built for USDG-correlated assets. As Aave's institutional and real-world-asset strategy expands, a regulated, widely distributed stablecoin like USDG is positioned to play a larger role across the protocol.

For Aave, the USDG integration is another step toward a protocol that can serve both crypto-native users and regulated institutions from the same shared pool of liquidity, without compromise on either side.

About Global Dollar Network

Global Dollar Network is an open network designed to accelerate and reward global stablecoin adoption. It is powered by Global Dollar (USDG), a stablecoin issued by Paxos Digital Singapore Pte. Ltd. and Paxos Issuance Europe Oy.

About USDG in the EU

Paxos issues USDG in the EU through Paxos Issuance Europe Oy ("PIE"). USDG is fully redeemable from Paxos on a one-to-one basis for U.S. dollars. Further information is available at paxos.com/eu.