Aave Labs has opened a community Temp Check to deploy Aave V4 on Arc, Circle’s new layer-1 blockchain, with USDC, EURC, and cirBTC listed as the initial assets under consideration. The proposal comes as Arc approaches its mainnet rollout. Aave founder and CEO Stani Kulechov said the plan includes a revenue commitment to the Aave DAO of at least $2 million per year for five years, bringing the total to $10 million.
Aave targets an early lending position on Circle’s new network
Aave Labs said a V4 deployment on Arc would place the protocol among the network’s primary lending markets. Circle built Arc to support digital dollar liquidity, tokenized assets, and onchain financial activity. In Aave Labs’ view, the deployment could also expand Aave’s presence in institutional and fintech liquidity flows while opening more market access for Circle-issued assets.
The proposal also points to potential gains in total value locked and protocol revenue, though it does not provide a numeric forecast. Asset selection is still open. Aave Labs said final approvals would depend on feedback from Aave DAO service providers, with risk assessments and parameter recommendations expected in later governance discussions.
Revenue backstop is part of the proposal structure
Alongside the deployment plan, Aave Labs outlined a revenue support framework under which the Aave DAO would receive at least $2 million annually. Kulechov said the commitment totals $10 million over five years. If realized revenue falls short during that period, certain participants in the Arc ecosystem would cover the gap.
That arrangement stands out as a central part of the proposal. It ties the possible Arc expansion to a defined income floor for the DAO rather than leaving the outcome entirely dependent on early market traction.
Proposal is still at the Temp Check stage
The initiative remains at the earliest point in Aave’s governance process. Aave Labs said the Temp Check is meant to gather community feedback before any formal progression.
If sentiment stays favorable, the proposal would move to the Aave Request for Final Comments stage, where technical specifications, incentive structures, liquidity commitments, and risk frameworks would be added. After that, it would proceed to an onchain governance vote through an Aave Improvement Proposal. If approved, deployment preparation would begin, and activation would be scheduled after successful execution on Ethereum mainnet.
For now, community members are being asked to comment on the Arc deployment, the proposed asset set, and whether the initiative should move to the next governance stage.