Aave V4 Draws $1.2 Billion in Deposits as Design Faces Questions
The protocol is deployed on Ethereum, Avalanche and Arc, with similar-risk markets able to share Hub liquidity within set limits.
Aave V4 has attracted about $1.2 billion in deposits as its risk-based architecture addresses questions about whether the protocol separates lending markets too rigidly.
The protocol is deployed on Ethereum, Avalanche and Arc, and supports third-party curators such as EtherFi. Its architecture separates markets into Hub and Spoke structures, with risk-based isolation as the default.
Markets with similar risk profiles can draw from shared Hub liquidity within preset limits. The structure can improve capital efficiency and fund utilization while preserving risk controls.
Aave founder Stani said V4’s codebase is significantly smaller than Aave V3’s. Spoke markets can also tap existing Hub liquidity directly, without requiring traditional curated vaults to build liquidity from zero.
Stani said complete liquidity isolation could fragment funds, reduce utilization and increase costs for users.
