Decentralized finance (DeFi) lending platform Aave has launched its V4 protocol on Ethereum after a binding onchain governance vote cleared its deployment.
On Monday, Aave announced the launch of its V4 protocol on Ethereum, introducing infrastructure designed to “expand onchain markets into real-world credit markets.” The company said this includes structured lending, fixed-rate borrowing and tokenized asset-backed credit.
The rollout follows a Snapshot vote that gained near-unanimous support for a subsequent Aave Improvement Proposal (AIP), a binding onchain vote that opened on March 26 and closed on Sunday. The proposal passed with about 433,000 votes in favor, or roughly 60%, versus about 282,000 votes against, or nearly 40%.
Aave’s path to V4 followed months of governance 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 marks a push by Aave to expand beyond traditional DeFi lending into more complex credit markets, and shows the protocol can still execute major upgrades despite prolonged governance disputes.
Aave V4 rolls out a modular design for onchain credit markets
Aave V4 introduces a modular design that separates shared liquidity from market-specific risk, allowing different credit markets to operate with distinct parameters while drawing from a common liquidity pool.
According to Aave Labs founder and CEO Stani Kulechov, the upgrade is designed to shift DeFi toward more active use of existing liquidity. “Aave V4 shifts the focus to the demand side, putting that liquidity to work across real credit markets,” he said.
An Aave spokesperson told Cointelegraph that V4 is designed to support a broader range of market structures, including institutional use cases.
Related: How a 2.85% price error triggered $27M in liquidations on Aave
Though specific implementations have not been revealed, the spokesperson told Cointelegraph that the architecture enables features like institution-specific markets, borrowing against custodied assets and real-world asset integration.
The spokesperson added that Aave will take a measured approach to rolling out V4, starting with conservative parameters and a limited initial scope.
Alongside the launch, Aave introduced Aave Pro, a new interface designed for advanced users to access V4’s markets. It also announced an integration with Chainlink as the protocol’s oracle provider, supplying price feeds and other data used in lending markets.
