Decentralized finance (DeFi) lending protocol Aave The company behind the blockchain has announced plans to upgrade the protocol. The proposed upgrade will lead to the release of the V4 version with a new architecture that will bring new capabilities to the protocol.
According to the company’s announcement, Aave V4 will increase modularity, reduce management overhead, optimize capital efficiency and more seamlessly integrate innovations such as Aave-specific stablecoin GHO.
While the V4 roadmap is in an advanced research stage, the blockchain firm proposes to develop it as part of a broader “Aave 2030 grant” proposal. Aave adopts a transparent development model that involves the project community throughout the feedback and testing phases.
Meanwhile, Aave Labs has planned a timeline for development of V4 that will run from Q2 2024 until mid-2025, when the protocol will be fully released. According to the company, DAO will act as a technical contributor while distributing all code bases made available by Labs and other contributors.
As Koinfinans.com reported, in a recent post on X, the blockchain firm classified Aave V4 as a significant advancement in DeFi. According to the post, the upgrade will create new frontiers including capital efficiency, risk management, and scalability. V4’s development comes nearly two years after the current iteration, V3, debuted on various networks. The current version went live on the Ethereum mainnet in early 2023.
Aave Labs sees its project as the largest DeFi protocol excluding (re)staking. He noted that the protocol has experienced significant growth in both user base and total value locked (TVL) since its launch in 2022. As of Labs’ announcement, the altcoin had an average market cap of $17 billion and was available on more than twelve networks.
