Aave Monad USDT0 Pool: $55.9M Supplied, $4.4M Withdrawable

Aave’s USDT0 lending pool on the Monad network held $55.9 million in supplied funds and $51.5 million borrowed as of a Sept. 12 snapshot at 21:09 UTC, leaving about $4.4 million unborrowed, or roughly 7.9% of the pool, available for immediate withdrawal. The pool displayed a 6.10% APR at the time.

The borrowed balance and the small unborrowed buffer mean a single large withdrawal could exceed the tokens available for same-block redemption if no fresh deposits or loan repayments arrive first. A hypothetical $5 million direct withdrawal would have exceeded the estimated unborrowed balance on that snapshot; there is no indication any such withdrawal was attempted or failed.

The 6.10% displayed APR for USDT0 combined a protocol APR of 4.34% with an estimated 1.76% in WMON reward incentives. A parallel Monad reserve for USDC showed the same displayed APR but a larger cash buffer: $197.3 million supplied with $180.0 million borrowed, leaving about $17.3 million unborrowed.

Service provider TokenLogic reported that USDT0 supply peaked at $167.3 million on Aug. 15 and fell to about $57.2 million over the following roughly three weeks, while outstanding debt remained between $53 million and $62 million. TokenLogic’s hourly data covering Aug. 8 through Sept. 7 showed USDT0 spent 261 of 721 hours above a 92% optimal utilization threshold and 13 hours above 98%. Its peak hourly borrower APR reached 27.21% at one point; that figure reflects a borrower rate at a single hour, not a realized supplier return.

Aave’s interest-rate model uses one slope below an optimal utilization point and a steeper slope above it. As utilization approaches full capacity, the model raises borrower rates. The higher borrower rate is intended to encourage loan repayments and to make supplying more attractive.

Independent reviewer LlamaRisk recommended raising the Slope1 parameter for the USDC and USDT0 reserves from 4.40% to 5.00% while keeping the 92% optimal utilization point and other parameters unchanged. The recommendation had not been confirmed for execution at the time of the snapshot. TokenLogic’s projection of a 6.28% displayed rate depended in part on ongoing incentive campaigns; the observed total on Sept. 12 was 6.10%.

Aave’s withdrawal rules limit redemptions to tokens that are not currently borrowed, and deposits used as collateral must leave enough to support any outstanding loans. In comparable yield architectures, withdrawals can first draw from idle tokens and then from a selected market; if both sources are exhausted, a withdrawal may revert unless an allocator reassigns liquidity or permissionless flows add funds. In-kind redemption can convert vault shares into a direct position in an underlying protocol, which can leave a holder with assets still lent out rather than immediate spendable stablecoins.

For the Monad USDT0 reserve, near-term indicators to watch are fresh deposits, borrower repayments and the unborrowed balance shown alongside the APR. The USDC reserve’s larger absolute unborrowed balance provides more room for fixed-dollar withdrawals than the USDT0 reserve did at the time of the snapshot.