Aave community reaches a milestone in technical upgrade. The V4 design draft was recently made public, and the underlying architectural ideas are quite noteworthy.

This update mainly focuses on four areas. First is the modular restructuring of liquidity—assets can flow seamlessly across pools, breaking the original liquidity silo problem. Second, the isolated markets are significantly enhanced, supporting the integration of over 500 long-tail assets, which means more small tokens will have the opportunity to be borrowed and lent within the protocol.

More interestingly, the upgrade of the smart liquidation system. Chain liquidation has always been a hidden risk in DeFi lending. The new system, by optimizing the liquidation mechanism, is expected to significantly reduce the impact of such risks.

According to plan, community voting will officially start in October, giving the market ample time to understand and discuss these changes. For players who have long been paying attention to the evolution of lending protocols, this wave of updates means that the entire ecosystem's risk management and asset accommodation capabilities are being elevated.