Aave will deploy V4 on Ethereum after administrative approval.
Decentralized finance (DeFi) lending platform Aave has launched its V4 protocol on Ethereum after clearing a mandatory onchain governance vote.
On Monday, Ave announced the launch of its V4 protocol on Ethereum, introducing infrastructure designed to “expand onchain markets into real-world credit markets.” The company said this includes structured loans, fixed-rate borrowing and asset-backed lending.
The release opened on March 26 and closed Sunday with unanimous support for the next Aave Amendment Proposal (AIP). The proposal passed with about 433,000 votes, or about 60%, with 282,000 against, or about 40%.
The road to V4 followed months of management wrangling. BGD Labs said it would leave in February, citing an “unbalanced organizational environment,” followed by the Ave Chan Initiative in March over concerns about governance standards and voting efficiency.
The launch shows Aave's push to expand beyond traditional DeFi lending into complex credit markets, and shows that the protocol is still undergoing major improvements despite long-standing governance disputes.
Aave V4 designs a module for onchain credit markets.
Aave V4 introduces a modular design that separates pooled liquidity from market-specific risk, allowing different credit markets to operate with separate parameters while drawing from a pool of pooled liquidity.
According to Ave Labs founder and CEO Stani Kulekov, the update is intended to shift DeFi into a more active use of existing liquidity. “Aave V4 shifts the focus to the demand side, making liquidity work in real credit markets,” he said.
An Aave spokesperson told Cointelegraph that V4 is designed to support a wide range of market structures, including institutional use cases.
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While specific implementations have not been revealed, a spokesperson told Cointelegraph that the architecture will enable features such as institution-specific markets, lending against owned assets and real-world asset aggregation.
The spokesperson added that Aave will take a measured approach to rolling out the V4, starting with conservative parameters and a limited launch range.
Alongside the launch, Aave introduced Aave Pro, designed for advanced users to access V4 markets. It also announced an integration with ChainLink as the protocol's oracle provider, providing price feeds and other data used in credit markets.
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