Aave v4 Update Overview: Parallel Reconstruction and Innovation

The launch of Aave v4 marks a significant upgrade to this decentralized lending protocol. The new version has been optimized in several areas, addressing long-standing issues while also introducing some innovative features. Below is a brief summary of the main features of Aave v4:

1. Unified Liquidity Management

Aave v4 adopts a centralized liquidity management model, unifying the management of all funds supplied and borrowed. This change not only improves the efficiency of capital utilization but also facilitates future functional expansions. Users no longer need to switch between different versions or manually migrate funds, greatly simplifying the operational process.

2. Intelligent Interest Rate Adjustment Mechanism

The new version introduces a fully automated interest rate adjustment system that can dynamically adjust the interest rate curve based on market conditions. This improvement reduces the governance burden while enhancing capital efficiency. Interest rates will be automatically adjusted according to supply and demand relationships, creating a fairer and more reasonable interest rate environment for suppliers and borrowers.

3. Risk Differentiated Pricing

Aave v4 introduces the concept of "liquidity premium," dynamically adjusting borrowing rates based on the risk status of collateral assets. This mechanism helps to more accurately reflect the risk levels of different assets, providing users with more reasonable lending conditions.

4. User Experience Optimization

The new version has launched smart accounts and vault functions, significantly improving the user experience. Users can manage multiple positions with a single wallet, simplifying the protocol interaction process. The vault function allows users to borrow without placing collateral into liquidity pools, reducing the likelihood of risk transmission.

5. Flexible Risk Management

Aave v4 supports the creation of independent risk configurations for single assets and introduces an automated asset delisting mechanism. These improvements make risk management more flexible and efficient, while simplifying the governance process.

6. Debt Risk Control

The new version introduces an excessive debt protection mechanism, effectively preventing the spread of bad debts and improving the overall stability of the system by automatically tracking and limiting bad positions.

7. GHO Stablecoin Integration

Aave v4 has achieved native integration with the GHO stablecoin, including support for direct minting of GHO on the liquidity layer, the introduction of a soft liquidation mechanism, and an emergency redemption feature. These measures aim to enhance the stability and usability of GHO.

8. Aave Network Planning

Aave plans to launch a new network layer as the core hub for the GHO stablecoin and lending protocol. This network will use GHO as transaction fees, centered around Aave v4, and will be controlled by the community through governance mechanisms.

Overall, the updates in Aave v4 reflect the team's deep understanding of user needs and strategic planning for future development. However, there are still differing opinions in the industry regarding the necessity of launching an independent network layer. Some viewpoints suggest that for projects that do not rely on high performance, staying within the Ethereum ecosystem might be more advantageous. Regardless, the launch of Aave v4 will undoubtedly bring new vitality and possibilities to the decentralized finance space.