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 received a 12-month grant to develop the V4 iteration
Aave governance has greenlighted 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 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 being disbursed 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 a total value locked of $12.7 billion, according to DeFi Llama. THEAAVE price is up 4.57% over the past 24 hours, according to The Defiantcrypto 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 intention to launch a tailor-made 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 will be part of a three-year roadmap designed to secure Aave’s position as a leading DeFi protocol. The roadmap also includes promoting 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.
Core components include the development of a “modular architecture” aimed at improving the efficiency of integrations, automatic interest rate adjustments powered by Chainlink, interest rate premiums for assets with risk profiles higher values and an updated liquidation engine.
The roadmap also includes several improvements relating to GHO, including support for payment of interest in the form of GHO to asset providers, improving the efficiency of GHO minting and a liquidation mechanism “ soft” based on the GHO.
Aave’s soft liquidations take inspiration from CurveLiquidation of LLAMA mechanism, converting users’ collateral into GHO during sharp market declines that would otherwise threaten to trigger liquidation proceedings. When the value of an asset increases, users’ funds are converted back into previous collateral assets, 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 Supports Lido Alliance and Greenlights StETH-Focused V3 Rollout