Hassan Maishera
On Monday, Aave Labs announced via X that the Aave DAO has approved the ARFC to deploy Aave V4 on Ethereum. Aave V4 introduces a modular architecture where Liquidity Hubs hold shared liquidity and Spokes define distinct borrowing environments with governance-bounded exposure.
This design preserves the depth and efficiency of unified liquidity while enabling more precise risk management and supporting a broader range of market structures. A deployment on Ethereum Mainnet would establish the foundation for V4 as Aave’s next-generation credit infrastructure.
V4 provides an additional risk pricing mechanic at the collateral level, so stronger positions are not diluted by weaker ones, and more complex token exposures contribute a premium in line with their risk profile. Thus, suppliers are compensated on terms that more closely reflect the risk drawn from shared liquidity, and protocol revenue benefits directly from diverse exposure.
In Aave V4, supply and debt are tracked through shares, so different borrowing environments can apply different market logic while still settling cleanly against the same balance sheet. Liquidity claims, debt, and liquidation state remain consistent even as Spokes diverge in how they price and manage risk.
This proposal covers the initial Ethereum Mainnet deployment of the Aave V4 codebase, the intended launch topology, the rollout path, the implementation and control model, the initial asset universe for risk parameterization, and the security basis for activation. Final parameter values remain subject to risk provider review and will be included in the activation AIP.
Aave protocol is a decentralized, open-source, and non-custodial money market protocol. Depositors earn interest by providing liquidity to lending pools, while borrowers can obtain overcollateralized loans by using the liquidity from these pools. AAVE is trading at $110.04 per token, up 4.5% in the last 24 hours.
