{"id":77836,"date":"2024-05-02T02:46:39","date_gmt":"2024-05-02T06:46:39","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=77836"},"modified":"2024-05-02T02:46:46","modified_gmt":"2024-05-02T06:46:46","slug":"aave-labs-unveils-v4-protocol-overhaul","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/aave-labs-unveils-v4-protocol-overhaul\/","title":{"rendered":"Aave Labs Unveils V4 Protocol Overhaul"},"content":{"rendered":"\n

Aave Labs presented a proposal for the forthcoming iteration of its protocol, which encompassed enhancements to GHO,<\/a> its stablecoin.<\/p>\n\n\n\n

\"Aave
Aave Labs Unveils V4 Protocol Overhaul<\/figcaption><\/figure>\n\n\n\n

As part of a five-year road map, Aave Labs, the company responsible for the decentralized finance (DeFi) lending protocol Aave, has outlined a proposal to evolve and enhance its protocol. <\/p>\n\n\n\n

The DeFi lending platform unveiled a governance proposal on May 1 to solicit community input regarding the upgrade of the protocol to version 4, the next iteration. <\/p>\n\n\n\n

The team stated that the proposal also encompasses \u201cmajor upgrades and expansions,\u201d to the Aave Network, a cross-chain liquidity layer, layer-1 deployments of non-Ethereum Virtual Machines (EVMs), and a “novel visual identity.”\u00a0<\/p>\n\n\n\n

By incorporating a “Unified Liquidity Layer” and a “completely new architecture,” Aave V4 would facilitate the integration of risk modules, isolation pools, and its native stablecoin GHO.” <\/p>\n\n\n\n

In addition, interest rates that can dynamically modify in response to market conditions and utilizing Chainlink data oracles are additional features that are being proposed. <\/p>\n\n\n\n

Additionally, the implementation of smart accounts and liquidity premiums to tailor borrowing costs to collateral risk profiles and to simplify position management for users, vaults, and smart accounts was proposed. <\/p>\n\n\n\n

\"\"
Proposed Unified Liquidity Layer infrastructure for liquidity providing.\u00a0Source: Aave<\/figcaption><\/figure>\n\n\n\n

A portion of the proposal centered on Aave's algorithmic stablecoin GHO, which debuted in July 2023 but is relatively insignificant compared to rivals like Tether USDT. USDC and USD Coin had $49 million in market capitalization. <\/p>\n\n\n\n

Suggestions about GHO include enhancements to the liquidation engine, including “soft” liquidations and variable liquidation incentives, and improved GHO integration, including interest-earning options. <\/p>\n\n\n\n

An emergency redemption mechanism for GHO debugging \r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a>scenarios\u00a0was also suggested\u00a0as part of the significant enhancement.\u00a0<\/p>\n\n\n\n

The proposal is undergoing a “temperature check” phase, which indicates community sentiment before an on-chain vote is conducted. <\/p>\n\n\n\n

The document delineates a progression schedule from the research conclusion in the second quarter of 2024 to the complete release of V4 by the middle of 2025. <\/p>\n\n\n\n

Aave Labs is seeking a grant of 15 million GHO and 25,000 stkAAVE, for a total value of approximately $17 million, to support the implementation of the initial year of the three-year strategy. <\/p>\n\n\n\n

DefiLlama <\/use><\/svg><\/span><\/a>estimates that Aave is the third largest DeFi protocol in locked value, at approximately $10 billion.\u00a0 At the time of writing, its indigenous AAVE, the token was trading at $82.35 after losing 9% in value over the previous week. Three years after its all-time peak of $660, it has decreased by 87.6%.\u00a0\u00a0<\/p>\n","protected":false},"excerpt":{"rendered":"

Aave Labs presented a proposal for the forthcoming iteration of its protocol, which encompassed enhancements to GHO, its stablecoin. As part of a five-year road map, Aave Labs, the company responsible for the decentralized finance (DeFi) lending protocol Aave, has outlined a proposal to evolve and enhance its protocol.  The DeFi lending platform unveiled a […]<\/p>\n","protected":false},"author":53,"featured_media":51510,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[73],"tags":[7115,5643,6097],"class_list":["post-77836","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-defi-news","tag-aave-2","tag-defi-2","tag-stablecoin-2"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/06\/700.jpeg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/77836","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/53"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=77836"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/77836\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/51510"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=77836"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=77836"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=77836"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}