Aave has launched liquidity incentives for PayPal USD (PYUSD) on its v3 Ethereum market. This move allows users who supply PYUSD to the protocol to earn rewards, a strategic effort to boost the stablecoin's adoption and liquidity within the DeFi ecosystem.

The incentive campaign is designed to integrate the TradFi-backed stablecoin more deeply into on-chain activities. The rewards distribution is managed via Merkl, a platform specializing in automated liquidity incentives.

This collaboration between a major DeFi protocol like Aave and a stablecoin from a global payments leader like PayPal underscores a growing trend. It highlights the increasing convergence of traditional financial infrastructure and decentralized protocols, as established players seek to leverage DeFi for greater distribution and utility.