Aave v4 Launches on Ethereum After DAO Revolt Over ₱1.45 trillion ($24 billion)
After months of infighting with DAO members over forced migration plans, Aave Labs launched v4 on Ethereum with a new hub-and-spoke architecture. The upgrade deploys three liquidity hubs designed to prevent liquidity fragmentation while keeping ₱1.45 trillion ($24 billion) in v3 deposits untouched.
Key Takeaway
Aave v4 launches after Labs retreated from forced migration, keeping ₱1.45 trillion ($24 billion) in v3 deposits safe.
Aave Labs launched v4 on Ethereum Monday, deploying three liquidity hubs to serve what Head of Engineering Emilio Frangella called the first complete rework since Aave V1. The new architecture splits the protocol into hubs that pool liquidity and spokes that create tailored lending markets.
The upgrade lands after a contentious period where Labs pushed the DAO to shift focus from maintaining v3 to promoting v4. That pressure contributed to the departure of two major DAO contributors, Bored Ghosts Developing and Aave Chan Initiative, who will not seek contract renewals. Labs initially wanted to force migration of the ₱1.45 trillion ($24 billion) in user deposits sitting in v3 but backed down after DAO pushback.
The three initial hubs — Core, Plus, and Prime — each carry different risk-reward profiles. Frangella said the design prevents siloing of liquidity, a problem that plagued earlier versions. Founder and CEO Stani Kulechov said v4 takes Aave into a new environment where it can start funding real-world opportunities, posting a lengthy vision for real-world asset financing last month.
The protocol will run alongside v3 rather than replacing it. Labs launched a new Aave Pro user interface with v4 and said the rollout prioritizes security over immediate growth. An unnamed Labs spokesperson said the DAO remains the governing body responsible for key decisions including hiring service providers, protocol upgrades, risk parameters, asset listings, treasury allocation, and expansion to new networks.
Kulechov said the architecture is completely modular, which means it can extend into new use cases that will emerge. He pointed to lending against data as a future possibility. Labs said it continues to play a role in building, offering strategic direction, securing partnerships, and growing awareness. The company obtained a UK Financial Conduct Authority electronic money institution license in July 2020 and relaunched the protocol under the Aave name in January 2020 after pivoting from its original ETHLend peer-to-peer model, with the new v4 deployment including three hubs on Ethereum at launch on March 31, 2026.
This article was written based on reporting from Dlnews.
