The Aave decentralized autonomous organization (DAO) has unanimously approved the Request for Comment (ARFC) proposal for the protocol's upcoming V4 upgrade, signaling full community support. The four-day governance vote concluded with 100% approval, paving the way for the next stage of development before a mainnet deployment on Ethereum later this year.
The V4 upgrade introduces a major architectural shift to a Hub-and-Spoke model. This design features a central Liquidity Hub that pools supplied assets, with individual Spokes connecting to it to apply specific lending rules and risk parameters. The goal is to reduce fragmentation and significantly improve capital efficiency across the protocol. The upgrade also includes deeper integration for Aave's native GHO stablecoin and a redesigned liquidation engine.
Following the governance success, Aave founder Stani Kulechov confirmed the protocol will now advance to preparing an Aave Improvement Proposal (AIP) for final on-chain approval. This process involves coordination with security and risk contributors. The initial deployment on Ethereum will take a "security-first" approach with conservative risk parameters, operating through a dedicated interface. The plan outlines three primary hubs: Core, Prime, and Plus, supporting assets including AAVE, GHO, wstETH, weETH, cbBTC, USDC, USDT, LINK, and XAUt.
The news coincided with notable market activity for the AAVE token. On March 23, the price traded near $110, marking a 2.85% increase over 24 hours. More significantly, daily trading volume surged by 65% to over $448 million, reflecting heightened investor interest. This development occurs amidst internal changes, as key contributor teams like BGD Labs and the Aave Chan Initiative have announced they will not renew their contracts and will wind down operations over the coming months.
