Decentralized finance (DeFi) lending platform Aave has launched its V4 protocol on Ethereum after a binding onchain governance vote approved its implementation.
On Monday, Aave announced the launch of its V4 protocol on Ethereum, introducing infrastructure designed to “extend onchain markets to real-world credit markets.” The company said this includes structured loans, fixed-rate loans and tokenized asset-backed loans.
The rollout follows a Snapshot vote that received near-unanimous support for another Aave Improvement Proposal (AIP). Binding online voting began on March 26 and ended on Sunday. Proposal passed with about 433,000 votes in favor, or about 60%, compared to about 282,000 votes against, or almost 40%.
Aave’s rise to V4 came after months of management disputes. BGD Labs said it was leaving in February, citing an “asymmetric organizational scenario,” followed by the Aave Chan Initiative in March over concerns about governance standards and voting dynamics.
The launch represents a push for Aave to expand beyond classic DeFi lending into more intricate lending markets and shows that the protocol can still make crucial improvements despite protracted governance disputes.
Aave V4 introduces a modular design for onchain credit markets
Aave V4 introduces a modular design that separates shared liquidity from market-specific risk, enabling different credit markets to operate with different parameters while benefiting from a common pool of liquidity.
According to Aave Labs founder and CEO Stani Kulechov, the update aims to shift DeFi towards more busy employ of existing liquidity. “Aave V4 shifts the focus to the demand side, leveraging this liquidity in real credit markets,” he said.
An Aave spokesperson told Cointelegraph that V4 is intended to support a broader range of market structures, including institutional employ cases.
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While specific implementations were not disclosed, a spokesperson told Cointelegraph that the architecture enables features such as institution-specific markets, borrowing against held assets, and real-world asset integration.
The spokesperson added that Aave will take a measured approach to the V4 rollout, starting with conservative parameters and a narrow initial scope.
Along with the launch, Aave introduced Aave Pro, a recent interface designed for power users to access V4 markets. It also announced integration with Chainlink as an Oracle protocol provider that provides price feeds and other data used in credit markets.
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