Aave V4 has officially launched on Ethereum Mainnet and is now fully integrated into DeFi Saver, with feature-rich support on day-one. With over $1B of positions in Aave V3 managed through DeFi Saver, we're excited to provide our signature tools for V4.
We are thrilled to announce that the latest iteration of DeFi’s most prominent protocol, Aave V4, has just gone live on Mainnet – and is already fully supported on DeFi Saver.
Since its early days as ETHLend, a novel P2P platform founded by a law student in 2017, the protocol has evolved into a cornerstone of DeFi, now boasting a TVL of $30B, across several of the largest networks.
We first integrated Aave back in 2020, with the launch of Aave V1, together with its signature flashloans, which have allowed us to power a plethora of advanced tools for position management since then.
In our long-term commitment to Aave, we are proud to go live with feature-rich support for V4, including our signature leverage management tools and Automation features, but before we get into details, let’s first talk more about the novelties that Aave V4 introduces.
The old, the new, and the unified
With Aave V3, liquidity is distributed across multiple independent markets on supported chains, each with its own borrowing conditions and borrowing rates. Additionally, V3 also introduced several important risk management features.
The features such as Isolation mode, Siloed borrowing, and E-mode have allowed Aave governance to fragment markets in order to also fragment risk, which consequently ended up fragmenting liquidity as well.
Aave V4: Unified liquidity
To combat these issues, Aave V4 has introduced unified liquidity, sourced in the form of Hubs and accessed through Markets (previously labelled as Spokes).
Because all Markets (Spokes) draw from the same underlying liquidity, this means that the same assets are now available across multiple markets, allowing for more competitive rates. So, the users do not interact with the Hubs, they supply and borrow directly from Markets (Spokes) of their choice, according to their specific parameters (asset type, collateral factor, supply and borrow caps, liquidation factor).
It’s also worth noting that the new Markets (Spokes) are modular, meaning they do not affect each other when added, modified, or replaced. Anyone can build a Market (Spoke); if it adds value to the protocol, it will be integrated, which in itself addresses the issue of rigidity for innovation with V3.
Aave V4: Risk Management
Since Markets are meant to accommodate various use cases, each one has its own risk parameters, called Risk Premiums. Unlike V3 borrowing rates, which were based on the principle of supply and demand, V4 borrowing rates are a sum of the base fee and risk premiums that depend on the Spoke asset and asset liquidity.
In simple terms, the safer your collateral, the less the fees you pay.
More flexible liquidation mechanisms with dynamic parameters have also been implemented. Instead of relying on a fixed close factor, liquidations now repay only the amount of debt needed to bring a position back to this target, which is set at the Spoke level.
What you can do on Aave V4 via DeFi Saver
Our goal with UI design for Aave V4 was to provide users with maximum insight into different Hubs and Markets (Spokes), so we can offer granular, full control of any positions managed at DeFi Saver, as you’re probably used to with our previous integrations/dashboards.
Both EOA and smart wallet DFS users can now:
- Use our 1-tx Leverage management tools, to leverage up or unwind their positions: Boost & Repay;
- Access Automated Leverage Management tools: Stop Loss, Take Profit, and set up leverage management on price;
- Set up Collateral & Debt switch or instantly switch from a long into a short position within one simple tx, with Position Flip;
- Lend assets and earn yield by supplying liquidity to the Hub;
- Use Loan Shifter to migrate from V3 to V4 (a dedicated tool for this is in the works);
- Supply, borrow, and withdraw, by easily finding the best metrics for your particular assets:
- Navigate your way to the Aave V4 dashboard, on the left sidebar;
- Click on Create, and filter out your preferred collateral and debt tokens;
- You can opt to use one of our presets as well, to long ETH/BTC or yield farm stables;
- Browse the given list of markets, grouped by Spoke or asset type, and easily see which ones offer the best conditions for your specific strategy;
- After you select the preferred collateral/debt tokens and click Create, just jot down the asset amounts and voila!.
In this way, you do not need to arduously go through each Spoke to find a certain asset, and compare it to that of another Spoke: everything is available on one page, at a glance.
Please keep in mind that Loan Shifter and Recipe Creator, however, are currently only available for smart wallet users, as well as 1-tx creating and closing.
All of this is just the initial release, there is a lot more in the works:
Look forward to Notify, some fresh Aave V4 zaps, and tools aimed at helping users easily migrate their positions from V3 to V4.
We hope you're at least half as excited as we are for everything that’s yet to come! In the next post, we will walk you through the UI and provide you with some tips for finding your way around with ease.
But until then, make sure to follow our X/Twitter accounts to never miss an update, and feel free to drop by our DFS Discord for any questions, suggestions, or feedback on the new Aave V4 integration.
Until the next post, stay safe out there!
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