Hassan Maishera
On Monday, Aave Labs announced via a blog post that Aave V4 is now live on the Ethereum blockchain. The foundational change introduced by Aave V4 is its Hub and Spoke architecture. A Liquidity Hub holds assets centrally, and Spokes connect to it with their own collateral types, risk parameters, and liquidation rules. When a user supplies through a Spoke, their capital enters the Hub and becomes available to every Spoke connected to it. When a borrower draws capital, the funds come from that shared Hub.
For builders, launching a specialized lending market on V4 means inheriting Aave's existing liquidity from day one rather than sourcing deposits from scratch.
V4 also introduces several significant changes to how the protocol prices risk, handles liquidations, and allows governance to update parameters. Aave Pro is Aave V4's dedicated user interface that surfaces all Hubs and Spokes in one place, shows users' current assets, rates, and makes it easy to find the right market for what they are trying to do. Users do not need to understand the full architecture to use the protocol.
The e-Mode Spokes are for users who hold a price-correlated token and want to borrow the asset it tracks. Because the collateral and borrowed asset move closely together in price, the protocol can offer better borrowing power.
The Prime Hub is designed for suppliers seeking a more controlled collateral posture. Note, borrowable tokens with the "core" prefix are credit lines from the Core Hub, and tokens drawn from other Hubs will have an appropriate prefix.
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 $97.31 per token, down 0.6% in the last 24 hours.
