Aave lists December AUSD principal token on Monad with 93% borrowing limit

Aave has added a fresh Pendle principal token to its V3 deployment on Monad. The new reserve, PT-AUSD-17DEC2026, has already filled its 30 million-token supply cap, with $29.67 million supplied.

The previous version of this token matures on October 8, 2026, and its holders needed somewhere to go.

What Aave actually listed

The asset is a principal token tied to AUSD, a stablecoin. A principal token is a claim on an underlying asset that comes due on a fixed maturity date, which in this case is December 17, 2026.

Aave copied the risk settings from the predecessor market, PT-AUSD-8OCT2026. Users cannot borrow the principal token directly. They can only post it as collateral.

That collateral use is limited to a stablecoin-focused eMode. Inside that mode, the loan-to-value ratio is 93% and the liquidation threshold is 95%.

The proposal to list the token was submitted on September 25, 2026. LlamaRisk, which advises Aave on risk, recommended it.

The October market set the template

The earlier PT-AUSD-8OCT2026 market launched with a supply cap of 20 million tokens. That cap was eventually raised to 80 million tokens. By October 2, 2026, 67.4 million tokens, roughly $67 million, had been supplied as collateral ahead of the October 8 maturity.

Borrowing activity backs up the appetite. AUSD credit on Aave’s Monad deployment saw active loans climb 113% to $8.7 million in the 15 days leading into early October. Deposits more than doubled over the same window, reaching $11.2 million.

Why the rollover matters

The core idea behind this listing is continuity. Fixed-maturity collateral has a built-in cliff, and users running leveraged stablecoin positions would otherwise have to unwind those loans as their token expires. According to the research behind the listing, the structure is designed to let users roll collateral forward without closing existing loans, keeping that capital inside DeFi instead of letting it walk out the door at maturity.

The strategy users are running here is usually called looping. A user posts the principal token as collateral, borrows stablecoins, and can repeat the process to amplify exposure to the yield embedded in the token. A 93% loan-to-value ratio makes that loop very efficient.

What this means for Aave and Monad

A 30 million-token cap filling this quickly suggests the October cohort was ready and waiting. The October market’s path from 20 million to 80 million tokens offers a rough playbook for whether Aave governance moves to raise the December cap.

There are real risks baked into the setup. High loan-to-value ratios leave little cushion if the principal token’s price drifts from where users expect it to be, and liquidations in looped positions can cascade if many users sit near the same threshold. The decision to bar direct borrowing of the principal token keeps the asset in a collateral-only role, which limits some of the ways the market could be stressed.