DeFi
Aave Labs Receives Grant to Develop V4 Iteration Over 12 Months
The Aave DAO has greenlit a grant distributing $12 million in GHO to Aave Labs over a one-year period.
Aave Labs awarded 12-month grant to develop V4 iteration
Aave governance has green-lighted a $12 million GHO grant for Aave Labs to develop Aave v4 over 12 months.
Avara appears on track to deliver the fourth version of Aave, the largest DeFi lending protocol, in 2025.
June 30, Aave Governancepass a proposal for improving the Aave [AIP] allocate 12 million GHO — Aave’s native stablecoin — to Aave Labs to fund the development of Aave v4 and new “visual identity assets” for the project.
Aave Labs will receive GHO3 million up front, with the remainder of the funds distributed over a one-year period.
“This AIP proposes a one-year technical contributor engagement for Aave Labs to act as a service provider for the development of Aave v4 and a new visual identity,” the proposal states.
Aave is currently the third-largest DeFi protocol with $12.7 billion in total value locked, according to DeFi Llama.AAVE price is up 4.57% over the past 24 hours, according to The Defiantcryptocurrency price feed.
Updated roadmap
Avara, the parent company that develops Aave, GHO and the social graph Lens, has announced plans to build theAave v4 protocol in May. Avara also presented its plan to launch a custom Layer 2,Aave Networkfollowing the launch of v4.
The rollout of Aave v4 is expected to occur in stages over several years, with Avara aiming to first deploy the revamped v4 codebase in mid-2025. The project also plans to launch a cross-chain liquidity layer (CCLL) that will allow Aave v4 to aggregate liquidity from multiple chains, with the CCLL not expected to be live until 2026 or 2027.
The launch of CCLL is part of a three-year roadmap designed to secure Aave’s position as a leading DeFi protocol. The roadmap also includes advancing the development of real-world asset products leveraging GHO, deploying Aave on networks that do not support Ethereum Virtual Machine smart contracts, and creating a new visual branding for the project.
Aave v4
The grant recently awarded to Aave Labs includes a roadmap outlining the development of version 4 over the next 12 months.
Key components include the development of a “modular architecture” to improve integration efficiency, automatic Chainlink-based interest rate adjustments, interest rate premiums for assets with higher risk profiles, and an updated liquidation engine.
The roadmap also includes several GHO-related upgrades, including support for GHO interest payments to asset providers, improved GHO minting efficiency, and a “soft” GHO-based liquidation mechanism.
Aave’s Soft Clearances Take Inspiration from CurveLiquidation of LLAMA A mechanism for converting user collateral into GHO during severe market declines that would otherwise threaten to trigger liquidation proceedings. When an asset increases in value, user funds are converted back into the previous collateral asset, with users suffering losses in the form of slippage.
Aave Labs will also develop a new visual branding for the project, including logos, color schemes, typography, illustrations and other graphic elements.
Aave Labs will provide monthly progress reports to the Aave DAO in accordance with the grant proposal.
Read more: Aave Community Backs Lido Alliance, Greenlights StETH-Focused V3 Deployment