Aave (AAVE)

What stands out to me most is @aave V4’s Hub and Spoke model, designed to unify liquidity in one simple system. + All capital flows into one central vault = the Hub. + Each market = a Spoke, from crypto to RWA, connects and shares that capital. This setup drives stronger capital efficiency, clearer risk management per market, and opens the door for institutions to access DeFi liquidity. You can explore it now through the new Aave Pro interface.

📌 Cointelegraph Connect: Cannes Edition is happening tomorrow. Packed with industry leaders joining us: @StaniKulechov, Founder & CEO of @Aave @luke_judges, Partner Director at @Ripple @ashtokyo, CCO at @Mercuryo_io @jdetychey, President of @Ethereum_France @al_nechaev, Partner at @fundersvc @MlvsBznz, Executive Director at @CantonFdn @mr_optimax, Co-founder & President of @centrifuge @0xMuchScience, Chief Blockchain Officer at @TokenySolutions @RedoudouM, Executive Director at @entethalliance @arthurkatz_eth, CIO at @OneAsset_io @charlesdhaussy, CEO of @dYdXfoundation @bees_neeth, Investment Partner & Co-founder at @etherealvc @0xJHan, CEO of @eulerfinance @0x_eunice, Co-founder of @monad @flipdazed, Founder of @KeyringNetwork @ASarhaddar, Founder & CEO of @ivaultapp @daosasha, Head of BD of @1Inch Builders get a chance to pitch the next big idea and compete for up to $180K in prizes, powered by @FundersVC with a $25K cash prize. 💸 One stage. One shot. Builders, make it count. Do not miss it, see you there.

Aave v3 USDC just received its @StakingRewards DeFi rating: A- That ties it for one of the highest-rated DeFi products currently tracked. $3.3B TVL · 24.5K users · Potential: AA+ Only Aave pools have cracked the A-tier so far. No other protocol has. https://t.co/9jgOBO59Oe https://t.co/u5ZZJV0BEM

So, you're telling me that the deprecated Aave V1 has a higher TVL than the much-anticipated Aave V4? https://t.co/u2lJdgCxYa

aave v4 went live recently on eth at first it looked like a normal version upgrade, after digging a bit, the change feels bigger than that the lending system itself got rebuilt liquidity moves differently now 🧵👇 here's what u need to know: → what Aave actually is → the limitation older versions had → what Aave V4 changes → the new hub & spoke system → the new credit model → why the rollout started slow ▫️what Aave actually is Aave is a lending protocol on Ethereum. ppl deposit crypto into it. other ppl borrow that crypto. borrowers pay interest. lenders earn that interest. so it works similar to a bank loan system. difference is the system runs through smart contracts no company holding funds. users interact directly w/ the protocol. ▫️the limitation older versions had earlier versions of Aave worked through many separate liquidity pools. each chain or market had its own pool of money. example: • deposit USDC on eth → only eth borrowers use it • deposit on Polygon → only Polygon borrowers use it liquidity stayed inside those buckets. so sometimes money sat idle in one place while another market needed it. that made the system less efficient. borrowing power depended on the size of that specific pool. ▫️what Aave V4 changes Aave V4 redesigns the system: instead of many isolated pools, it creates a coordinated liquidity system. the idea is simple: money sits in one shared structure. different lending markets access that shared capital when they need it. this means funds can move more efficiently across the protocol. borrowers can tap into deeper liquidity. lenders may see better utilization of their deposits. ▫️the new hub & spoke system the core design of V4 uses something called a hub & spoke model. this is basically a structure for how liquidity moves inside the protocol. the hub acts as the central liquidity source. the spokes are individual lending environments that connect to the hub. users interact mainly w/ the spokes. those spokes pull liquidity from the hub when needed. the hub also limits how much liquidity each spoke can use. this keeps risk contained while still sharing capital across the system. ▫️the new credit model V4 also changes how borrowing risk is handled. in earlier versions, interest rates were mostly uniform across markets. now the system adjusts borrowing costs based on risk. assets considered safer can receive lower borrowing rates. riskier collateral leads to higher borrowing costs. the protocol also tracks positions more precisely through share-based accounting. this helps manage deposits and loans across multiple markets at once. ▫️why the rollout started slow Aave did not release V4 fully open on day 1 the launch began w/ restricted settings. only limited assets and liquidity caps were allowed at first. the goal is to monitor the system closely. governance and the security council can react if something unexpected happens. this approach reduces risk while the new architecture starts operating on mainnet. that's a wrap! if you found this useful, consider reposting it 🤝

Aave 🤝 Chainlink https://t.co/Y0Kz2pDEZb