Aave launched its v4 upgrade on Ethereum, aiming to extend DeFi to the real-world credit market.

According to Mars Finance, Aave has officially launched its v4 upgrade on Ethereum after approximately two years of development. This upgrade introduces a new architecture that separates lending markets while sharing liquidity, aiming to expand DeFi from crypto-native lending to real-world assets and institutional use cases. Version v4 changes Aave's market organization, allowing different types of lending markets to operate independently while sharing the same liquidity pool, enabling users to lend and borrow assets beyond crypto tokens in the future. Stani Kulechov, founder of Aave Labs, stated that lending is based on trust and requires lending conditions that reflect market conditions. He also pointed out that the upgrade facilitates development and expansion on top of the protocol by other teams. In terms of capital efficiency, version v4 also allows for the reinvestment of idle funds within the system. The upgrade launched with a limited set of markets and conservative parameter settings; more features will be added gradually after governance resolutions. This launch comes at a time when there are governance disputes within the Aave ecosystem regarding decentralization and revenue distribution.