Aave Labs has launched Aave v4, a major upgrade to the world’s largest decentralized finance protocol, which holds nearly $24 billion in user deposits. The new version introduces a modular “hub-and-spoke” architecture designed to prevent liquidity silos and is intended to run alongside the existing v3 platform. The rollout follows internal governance disputes within the Aave DAO, which oversees the protocol.
**Aave Labs** has launched **Aave v4**, a redesigned version of its $24 billion predecessor, **Aave v3**. Company executives stressed that v4 will run alongside v3, not replace it, after the **Aave DAO** cooperative protested an initial plan to migrate users.
The new protocol introduces a hub-and-spoke model where hubs are liquidity pools and spokes are tailored lending markets. Emilio Frangella, head of engineering at Aave Labs, said on X that this represents the first complete rework since the original Aave V1.
“This also reduces or completely eliminates the need to bootstrap liquidity through incentives or other initiatives whenever a new borrowing configuration is deployed,” the executive stated. The design aims to prevent the siloing of liquidity across different markets.
Aave founder and CEO Stani Kulechov has envisioned the protocol financing real-world infrastructure like solar arrays and data centers. In a recent video, he said v4 takes Aave into a new environment for funding real-world opportunities.
The initial launch on Ethereum features three hubs: Core, Plus, and Prime, each with a different risk-reward calculus. This gradual rollout prioritizes security over immediate growth, according to the developers.
The launch follows a contentious period where Aave Labs and prominent DAO members fought over the protocol’s direction. This conflict led to the acrimonious departures of two major contributors, Bored Ghosts Developing and Aave Chan Initiative.
An Aave spokesperson said the company continues to build and offer strategic direction, which the community has supported. However, they added that the DAO remains the governing body responsible for key decisions like protocol upgrades and treasury allocation.
