Aave news

Aave is set to release its V4 protocol upgrade in Q4 2025, introducing a modular “hub and spoke” design that separates liquidity hubs from market spokes, each with distinct risk profiles and rates. The upgrade adds a unified wallet‑level UI, dynamic risk settings, a health‑targeted liquidation engine, optional Position Managers, and a multi‑call batching feature. With TVL exceeding $40 B and DeFi overall near $156 B, the V4 launch is highly awaited; next steps include whitepaper release, public code, and testnet.

Aave reached $30.5 B in active loans as of Sept. 18, accounting for roughly 65 % of $46.72 B in total active DeFi lending, outpacing the nearest competitor MorphO with under $5 B; the protocol’s TVL stands at $42 B, making it the largest DeFi protocol by TVL and, based on deposit figures, the 53rd largest U.S. commercial bank. In the last week Aave collected $24.6 M in fees, placing it fifth among crypto protocols and third among purely decentralized ones behind Pump.fun and Uniswap. Traders use Aave for leveraged positions and yield, and the protocol offers high APY on stablecoins—USDC on Base yields 5.76 % versus the 0.39 % average bank rate—generating significant capital inflows. The record growth in active loans demonstrates investors’ growing preference for decentralized platforms to generate leverage and yield, cementing Aave’s dominant position in the DeFi lending market.

Aave Labs released its V4 roadmap, outlining a Q4 mainnet launch that will replace aTokens’ rebasing mechanics with ERC‑4626 share accounting to improve integration, tax treatment and reliability. The plan includes code publication, a redesigned testnet interface, and a comprehensive security review. Strategically, Aave’s governance, as noted by a delegate of the Aave Chan Initiative, will wind down economically under‑performing deployments on layer‑2 and alternative layer‑1 networks, citing that 86.6 % of revenue is now generated on Ethereum mainnet. The DAO intends to formalize proposals to shut down under‑used chains, tightening its focus on profitable verticals such as the native stablecoin GHO. This shift signals a move away from the “spray‑and‑pray” multichain expansion of 2021‑23, consolidating resources on a smaller set of strategically chosen deployments while preparing a cleaner, standard‑compliant V4 launch.

Aave DAO plans a major overhaul, announcing shutdown of over half its underperforming Layer‑2 deployments while restructuring governance and focusing on mainnet revenue. The Aave Chan Initiative report shows that 86.6% of revenue now comes from the mainnet, leading the DAO to cut costly Layer‑2 instances that offer little return. While the move could streamline operations and lower incentive costs, it risks political backlash and a temporary dip in total value locked as users and partners on those chains react. A core part of the plan is to invest over $100 million in the GHO stablecoin, creating a credit line backed by BTC, ETH and AAVE and running weekly buy‑backs of $500k–$1 million for 18 months. If executed successfully, the shift could boost Aave's revenue and market position, but risks of temporary TVL loss and community pushback will need careful management.

Aave, the largest decentralized lending protocol, has proposed cutting its exposure to the Ethereum layer‑2 network Scroll amid growing instability in Scroll’s decentralized governance model. The proposal, submitted by the Aave Chan Initiative on September 11, calls for defensive steps such as raising the reserve factor of all listable assets to 90 %, lowering supply caps to existing levels, and cutting borrowing caps on all borrowable assets. Implementation will follow the Direct to AIP process to enable swift deployment of urgent changes. According to DeFiLlama data, Aave currently holds roughly $6 million in total value locked on Scroll, one of the network’s smallest liquidity pools. Scroll’s DAO halted new proposals to redesign governance after leadership turbulence, including the resignation of its lead, Eugene, leaving several key initiatives stalled. The pause aims to protect stability while aligning governance structures for long‑term growth.

Cardano founder Charles Hoskinson announced plans to partner with Aave, Chainlink, and World Liberty Financial’s USD1 stablecoin to strengthen the blockchain’s DeFi sector. In an AMA he said that integrating these projects would keep Cardano competitive amid rising competition. USD1, a Trump‑backed stablecoin that ranks sixth in market cap, has attracted institutional buyers like Binance, and Hoskinson believes its inclusion would boost liquidity and credibility for Cardano’s limited stable‑coin market. Aave, the largest lending protocol with roughly $40 bn TVL, would expand Cardano’s under‑developed lending services. Chainlink’s oracle network is essential for connecting blockchains to real‑world data; Hoskinson cited the U.S. Department of Commerce’s decision to bypass Cardano when distributing economic feeds because it lacks Chainlink (and Pyth) support. He warned that failing to pursue these integrations risks Cardano falling behind competitors, calling for swift action.

Aave introduced Horizon, a permissioned marketplace enabling institutional investors to borrow stablecoins against tokenized real‑world assets. The platform uses a restricted instance of the Aave V3 protocol so that only vetted participants can provide collateral such as U.S. Treasury‑backed tokens, corporate bonds, and money‑market‑fund tokens. Compliance‑focused infrastructure addresses regulatory hurdles that have traditionally limited institutional entry into DeFi. Early suppliers include Centrifuge, Circle, VanEck, WisdomTree and Ripple, and the first collateral tokens represent yields from low‑risk, institutional‑grade assets. The dual‑structure design lets eligible investors supply RWA collateral while any DeFi user can access the resulting stablecoin pools, creating a liquidity bridge between traditional and decentralized finance practices.

Aave hit $41.1 billion in total value locked, ranking as the 54th largest U.S. commercial bank and falling only about $300 million short of surpassing Bank OZK. Including its $28.9 billion in outstanding borrows would lift the combined figure to $71.1 billion, placing it 37th among U.S. banks. The protocol controls about 50 % of the $81.5 billion DeFi lending market, nearly six times larger than rival Morpho, and it also set last‑week records of $3 trillion in cumulative deposits and more than $29 billion in active loans. Aave’s token surged 177 % from its April low to $316.74. Institutional use examples include Nasdaq‑listed BTCS leveraging Aave for yield and Ethena’s $6.4 billion stablecoin deposits. These milestones underscore Aave’s emergence as institutional‑grade infrastructure amid strong DeFi lending growth.

AAVE slid from $385 to $339 on August 23 amid World Liberty Financial rumors, yet the $339 level has held as key support. The dip was largely sentiment‑driven; long‑term holders remained largely unchanged, preserving the uptrend. Exchange reserves fell 4.33% to 5.4 million tokens while whale wallets grew 13.49%, signaling confidence and accumulation. Spent‑coin metrics dropped 67%, and the cost‑basis heatmap shows strong demand clusters near $339‑$337, confirming support. The price is near $340, with Fibonacci extending to $430 as the next bullish target, yet resistance appears at $350‑$352. A break below $275 or $272.90 could invalidate the uptrend, while short‑term support near $334 remains solid.

World Liberty Financial (WLFI), a DeFi venture tied to former U.S. President Donald Trump, has sparked a governance dispute over a rumored partnership with the Aave lending protocol. WLFI said its token would transfer and trade from September, while a leaked proposal suggested Aave could get 7 % of WLFI’s supply—nearly $3 billion—and a 20 % share of future revenue. WLFI representatives denied the claim as “fake news,” but Aave founder Stani Kulechov said the proposal had passed the DAO and WLFI had agreed. The disagreement sent Aave’s token price down about 2 %, fluctuating between $343 and $368 before falling to $346, and highlighted how governance uncertainty can sway markets. The episode underlines the need for clearer, contractual governance in token collaborations and may affect WLFI’s launch and trust in the broader DeFi ecosystem.