The Aave protocol has taken a major step towards deploying its highly anticipated V4 upgrade on the Ethereum network. A Request for Comment (RFC) proposing the deployment passed with near-unanimous support, receiving 645,000 governance tokens in favor, with only 537 votes against. Founder Stani Kulechov confirmed the successful passage, stating the team is now moving towards a final Aave Improvement Proposal (AIP) for a formal governance vote and a "safe, controlled, security-first launch."
Aave V4 is described as the protocol's most significant upgrade yet, designed to transform on-chain finance. It aims to enhance capital efficiency through new collateral types with hard maturities, expand credit structures with defined repayment paths, and boost efficiency in cash-flow-backed markets. The deployment will be structured across three distinct hubs: a Core Hub with seven specialized Spokes, a Prime Hub for bluechip, non-borrowable collateral, and a Plus Hub concentrating Ethena-related strategies.
Concurrently, Aave has unveiled the radical "Aave Will Win" framework, a proposal to redirect 100% of all protocol revenue directly to the Aave DAO treasury. Announced in February 2025, this initiative seeks to supercharge the community-controlled treasury to fund ecosystem growth and specifically finance the development and deployment of Aave V4. This model represents a full embrace of decentralized governance, moving away from traditional corporate profit models.
The framework is seen as a strategic move to create a powerful "war chest" for grants, bug bounties, liquidity incentives, and security audits. It could significantly strengthen the value accrual mechanism for the AAVE token, as holders would govern the allocation of all protocol-generated income. The proposal is currently in a community feedback phase before a formal on-chain vote.
These developments come as Aave solidifies its position as the DeFi lending leader with a Total Value Locked (TVL) exceeding $25 billion. However, the protocol has faced internal challenges, including the recent exit of technical partner BGD Labs. The community and team are acutely aware of the risks, especially following the recent shutdown announcement from former rival Balancer Labs.
