Being still on development, Aave V4 is predicted to shake up DeFi lending with its brand-new mechanism design. One smart system is ready to set the higher standard for Aave as it withstands the reputation in terms of lending protocol.
Down here is a re-edit from the ghost itself to explore V4 (referred from the Aave blog)1. Liquidity Hub or so called a “unified powerhouse”
In V4, liquidity is no longer split across separate markets. Instead, all assets are stored in a unified Liquidity Hub for each blockchain network.
The Hub operates behind the scenes as the central liquidity source while users interact with Spokes as their entry points. Key features include:
- Authorization control tracks which Spokes can access specific assets and enforces withdrawal limits
- Core accounting ensures total borrowed assets never exceed supplied assets
- Share-based tracking uses an efficient calculation
system that handles interest accumulation properly
This design fixes V3's biggest headache where assets stuck in one market couldn't help meet borrowing demand elsewhere. Now, all liquidity flows through the Hub, making the whole system more efficient, delivering better rates for both lenders and borrowers.
