Aave V4 Launches with Hub-and-Spoke Architecture

Aave has made significant strides in the DeFi space with the launch of its V4 protocol on Ethereum. The upgrade introduces a hub-and-spoke architecture, which allows for a central liquidity 'Hub' to extend credit lines to multiple lending markets.

The three main hubs established by Aave are Prime, Core, and Plus, each segregating assets and use cases by risk level. This design enables RWAs, fixed-rate lending, and complex credit structures to sit in their own spokes, with conservative caps and isolation mechanisms, without fragmenting Aave's overall liquidity.

The V4 upgrade is a key component of Aave's 'master plan,' which aims to position the protocol as a backbone for an on-chain credit system. The protocol has already processed over $3.33 trillion in total deposits since launch and issued close to $1 trillion in loans, generating around $885 million in fee revenue.