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

Introduction

Aave has added a new principal token, PT-AUSD-17DEC2026, to its V3 deployment on Monad. The token is tied to AUSD and has a 30 million-token supply cap, filling its cap within a week of listing.

Risk Settings

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.

Borrowing Activity

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.

Looping Strategy

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.

Risks and Benefits

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.

Conclusion

The listing aims to provide continuity and is part of Aave's strategy to keep capital inside DeFi, rather than letting it walk out the door at maturity.