AAVE V4 INTRODUCES LIQUIDITY HUBS AND MODULAR LENDING

Summary from the TLDR Crypto newsletter

Aave V4 re-architects DeFi lending by replacing fragmented markets with unified “Liquidity Hubs” and modular “Spokes.” Each spoke (Core, E-Mode, RWA, Vault, or custom) has isolated risk and draws from a shared liquidity pool, enabling more tailored borrowing configurations without cross-contamination. New features include support for fixed rates, LP shares as collateral, real-world asset integration, and institutional permissioning. The modular design improves capital efficiency while allowing diverse risk pricing for the same asset, like higher USDC yields in Ethena-specific spokes.