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Aug 12 • 7 tweets • 5 min read
Deep Dive into the Next Generation of DeFi || @Aave V4
Aave V4 will introduce a new architecture and innovative concepts that will fundamentally change DeFi lending.
In this thread, we’ll explore in detail how it works, what it changes, and the benefits it brings ↓
One of the biggest architectural changes is the introduction of Liquidity Hubs.
A Liquidity Hub can be seen as a Unified Liquidity Layer — the core of the new Aave architecture.
This means liquidity will no longer be fragmented by market, but unified per network.
The hub will manage supply and borrow caps, interest rates, supported assets, and incentives.
► The major advantage: other modules will be able to draw (=borrow) liquidity from it.
This solves the liquidity fragmentation problem of Aave V3, as multiple “spokes” will be able to interact with the same shared liquidity source.