Aave launches V4 on Ethereum with shared liquidity model for onchain lending

Aave Labs has launched Aave V4 on Ethereum mainnet, introducing a new architecture designed to make onchain lending more scalable and flexible. The release marks the protocol’s biggest structural change since V1 and comes after more than two years of development.

The core change is V4’s hub and spoke model. Under the new setup, a central liquidity hub holds assets while connected spoke markets can define their own collateral types, risk settings, and liquidation rules. That allows multiple lending environments to share one pool of capital instead of each market needing to bootstrap deposits on its own.

Aave says that design should let very different use cases sit on top of the same liquidity base, from more conservative institutional style markets to ETH correlated borrowing setups and strategy-focused environments. At launch, V4 goes live on Ethereum with three liquidity hubs, including Core, Prime, and Plus, alongside e-Mode spokes for closely correlated collateral and borrowed assets.

The protocol is also rolling out Aave Pro, a new interface built for V4 that gives users a single view across hubs and spokes, including rates, health factor, and risk premium data. Aave said the aim is to keep the user experience familiar even as the underlying market structure becomes more modular.

The launch comes with deliberately conservative supply and borrow caps. Aave said those limits will be raised gradually by governance as live usage is observed, reflecting a cautious rollout for a system meant to support a wider range of lending markets over time.

The protocol says it has processed more than $1 trillion in cumulative loans and controls over half of the decentralized lending market. Recent market data also points to Aave remaining the dominant player in DeFi lending going into the V4 launch.

Aave said V4 went through about 345 cumulative days of review involving four audit firms, four independent researchers, and a six-week Sherlock contest with more than 900 participants. Recent reports on the audit process said the review included formal verification, manual audits, fuzzing, and invariant testing, with no critical or high-severity bugs disclosed publicly.

The broader bet behind V4 is that DeFi lending still has a long runway. Aave argues that onchain lending remains a tiny fraction of global financial assets, and V4 is built to help close that gap by making it easier to launch specialized markets on top of shared liquidity.

Source