PancakeSwap is deepening its footprint on Monad with the addition of a new MUSD-USDC stablecoin pool, bringing the total number of incentivized liquidity pools on the chain to 17. The move pairs MetaMask’s wallet-native stablecoin with USDC, offering liquidity providers boosted annual percentage rates distributed through the Merkl incentive platform.

What’s in the pool

MUSD, or mUSD, is MetaMask’s stablecoin that launched in September 2025. It’s backed 1:1 by short-term US Treasury bills, which makes it structurally similar to competitors in the treasury-backed stablecoin space.

The boosted APRs for this pool and the other 16 incentivized pools on Monad are facilitated through Merkl, a platform that handles reward distribution for DeFi protocols. Rather than PancakeSwap manually distributing incentives, Merkl automates the process, letting liquidity providers claim rewards based on their contribution to the pool.

PancakeSwap supports both its v2 and v3 concentrated liquidity models on Monad. The v3 model lets users specify price ranges for their liquidity, which can dramatically improve capital efficiency on stable pairs where the price barely moves.

Monad’s growing DeFi stack

PancakeSwap’s initial liquidity incentives on Monad kicked off around November 2025, and the protocol has been steadily adding pools since then. Previous boosted pairs included MON-USDC, AUSD-USDC, and wrapped synthetic MON variants, covering both volatile and stable trading pairs.

The addition of MUSD-USDC on June 15, 2026 brings the total to 17 incentivized pools. MetaMask’s involvement adds another layer: by pushing mUSD into PancakeSwap’s incentivized pools, the wallet provider is creating familiar on-ramps for its user base.

What this means for liquidity providers and investors

The specific APR figures were not disclosed with this announcement, which means investors will need to check the Merkl platform directly for current rates. APRs on incentivized pools tend to be highest in the early days when liquidity is still building, then compress as more capital flows in.

One risk worth flagging: incentivized APRs are temporary by nature. When the rewards dry up, liquidity tends to migrate to wherever the next boost appears. The real test is whether the pool generates enough organic trading volume to sustain competitive returns after incentives taper off.

The treasury-bill backing of mUSD provides a degree of structural safety that purely algorithmic stablecoins can’t match. But investors should still evaluate smart contract risk on both PancakeSwap’s Monad deployment and the Merkl distribution layer, as multi-protocol interactions create additional attack surface.