Aave V4 debuts on Avalanche as Kulechov predicts $100B in RWAs

Aave V4's first deployment beyond Ethereum lands on Avalanche, targeting a dedicated credit market for tokenized real-world assets that its founder says will double to $100 billion by year-end.

Aave Labs launched Aave V4 on Avalanche on Wednesday, marking the lending protocol's first expansion beyond Ethereum and laying the groundwork for specialized credit markets backed by tokenized real-world assets. The deployment uses Aave V4's Hub and Spoke architecture, which supports dedicated borrowing markets with shared liquidity infrastructure and tailored collateral frameworks, according to a statement.

"One of the first markets we plan to launch on Avalanche is a dedicated credit market for tokenized assets," Stani Kulechov, founder of Aave Labs, said. "That combination creates new opportunities to deepen liquidity, improve capital efficiency, and expand access to borrowing against tokenized assets."

The platform is designed to support tokenized assets including US Treasuries, money market funds, private credit, and corporate bonds. Aave's V3 protocol on Avalanche has already facilitated billions of dollars in liquidity, making the chain a natural starting point for V4's multichain expansion strategy. John Wu, president of Ava Labs, said the integration gives institutions access to borrowing and liquidity infrastructure comparable to traditional financial markets.

The launch comes as the tokenized real-world asset market accelerates. Kulechov predicted the sector will grow from roughly $50 billion to $100 billion by December 2026, citing accelerating institutional adoption. BeInCrypto research published this week tracked roughly $60 billion in tokenized RWAs across more than 7,000 products and 12 asset classes, though it found the market remains heavily concentrated. Tokenized US Treasury debt alone reached about $15 billion across 100 assets, with 16 products holding more than $100 million each — the only asset class to reach production-grade maturity, the report said.

Tokenization grows, but access remains narrow

Despite the growth, 97% of tokenized asset value sits outside US retail reach, with only about $1.7 billion accessible through 1940 Act structures, according to BeInCrypto. Figure's private HELOC channel accounts for $18.3 billion, or 31% of the market, while offshore and non-US frameworks represent another $13.8 billion. The report found that 39% of market value has no identifiable regulatory framework when Figure's HELOC business is included.

On Hyperliquid, open interest in real-world asset markets surged to a record $3.6 billion, according to The Block, with RWA markets now comprising about 30% of the platform's total activity. Hyperliquid's overall open interest reached an $11 billion peak in 2026.

For Aave, the Avalanche deployment represents a test case for V4's multichain strategy. If the dedicated credit market for tokenized assets gains traction, it could unlock institutional lending demand that has remained largely untapped in DeFi. The protocol's ability to support multiple asset classes under a unified liquidity framework will determine whether tokenized RWAs move beyond Treasuries into private credit and corporate bonds at scale.

This article is for informational purposes only and does not constitute investment advice.