DeFi
DeFi Aave Protocol Launches Major Update With Protocol V4
Aave Laboratories has unveiled its 2030 strategic roadmap, which includes several key initiatives such as Aave V4, a new visual identity and expanded challenge functionality.
On May 1, the DeFi lending platform launched governance proposal dubbed “Temp Check” to solicit community feedback on updating its protocol.
At the heart of the plan is the release of Aave V4, which would significantly improve the protocol’s user interface and expand its functionality across many blockchain networks.
The latest version of Aave benefits from improved operational fluidity through the inclusion of a Cross-Chain Liquidity Layer (CCLL) that enables seamless asset transfers between supported chains.
Aave also announced plans to integrate real-world assets (RWA) into its native stablecoin, GHO, in partnership with ChainLink. The algorithmic stablecoin, introduced in July 2023, has a market valuation of $49 million, making it a minor player compared to competitors such as Tether (USDT) and the USD coin (USDC).
Suggestions for GHO consist of improvements to the liquidation engine, including “soft” liquidations and variable liquidation incentives, as well as better GHO integration, including interest generation options.
An emergency reimbursement mechanism for GHO unanchoring scenarios has also been proposed as part of the major upgrade.
The plan presents a three-year development schedule. Aave Labs intends to regularly connect with the community, including feedback sessions and annual reviews, to ensure that project progress is consistent with community expectations and changing market conditions.
Aave Labs also advocated a shift from a retroactive funding model to a proactive funding model based on open budgeting and community approval before the project begins. The planned budget includes 15 million GHO and 25,000 stkAAVE for research, development and safety audits in the first year.
Redesigned visual identity
Aave also proposed updating its visual identity to better reflect its future strategic goals and increase brand recognition in the challenge industry. The new design strives to convey a modern and distinct image, in line with Aave’s inventive approach.
Aave Labs welcomed broad participation from developers and community members in achieving its goals, emphasizing that governance of the protocol will remain decentralized. Contributors are encouraged to actively participate in discussions and development processes, shaping the future of the protocol.
Following community feedback, Aave Labs intends to revise it and include it in the official Aave governance framework before final approval. Documentation for this project is provided under the CC0 license, allowing open collaboration and extensive contributions.
At the time of writing, AAVE was trading at $83.41, up 3.4% in the last 24 hours, according to data from CoinMarketCap. However, the token fell by 8% in the previous week due to the recent decline in the global crypto market.
AAVE 24-Hour Price Chart | Source: CoinMarketCap