Aave advances V4 on Ethereum amid governance dispute

What to Know:

• Governance reviews V4 Ethereum activation mechanics, risk framework, rollout; token holders decide.
• Hub-and-Spoke pools liquidity centrally, isolates risk per spoke for safer liquidations.

Aave governance is reviewing a proposal to activate Aave V4 on the Ethereum mainnet. The Aave governance proposal centers on Ethereum mainnet activation mechanics, risk design, and the rollout path, with changes framed to be decided by token holders.

According to the Aave governance forum, Aave Labs compiled feedback from risk contributors including Chaos Labs, LlamaRisk, and TokenLogic on initial configurations for V4’s Hub-and-Spoke design. The model aims to pool liquidity in a central hub while isolating risk at the spoke level to compartmentalize collateral and liquidation behavior.

According to Aave Labs, the V4 upgrade has undergone roughly 345 days of security review under a “security-by-design” approach. The process integrates risk input alongside audits to align activation with conservative parameters at launch.

As reported by Blockworks, public testnets are live and mainnet rollout is expected in 2026, subject to governance approvals and community sign-offs. Timelines remain conditional on successful reviews and on-chain votes.

Why it matters for users, delegates, and liquidity providers

For users, the Hub-and-Spoke architecture is intended to limit spillover from higher-risk assets by ring-fencing exposures at the spoke level. In plain terms, pooled liquidity could remain efficient while specific markets adopt bespoke risk and liquidation settings.

For delegates, the immediate task is to evaluate the activation proposal’s security evidence, parameterization, and governance safeguards. Clarity on what is proposed versus what is already approved is central to maintaining process integrity.

For liquidity providers, isolated risk may alter how collateral types, rate curves, and liquidation thresholds interact across spokes. Funding flows and incentives could change as the DAO calibrates markets within the new architecture over time.

ACI and Marc Zeller vs Aave Labs on revenue and brand

As reported by Unchained Crypto, the Aave Chan Initiative (ACI) advanced a comprehensive package informally tied to the V4 context, requesting about $51 million and proposing that 100% of revenue from Aave-branded products accrue to the DAO. In ACI’s framing, the program is identified as “Aave Will Win,” said Aave Chan Initiative.

As reported by The Block, ACI founder Marc Zeller published an analysis of past Aave Labs funding on the order of roughly $86 million and questioned measurable returns to the DAO. The same reporting highlights Zeller’s concern that concentrated voting blocs could sway strategic outcomes, including decisions related to V4.

According to TradingView coverage, Aave Labs founder Stani Kulechov supported redirecting non-protocol product revenue to the DAO through structured, transparent processes. He framed V4 as a major upgrade that should progress via established governance milestones rather than abrupt transfers of control.

The dispute over brand assets and top-line revenue control underscores a broader delineation between DAO ownership and service-provider roles. Outcomes in these votes could influence how DeFi protocols balance decentralization with operational execution going forward.

Disclaimer: The information on this website is for informational purposes only and does not constitute financial or investment advice. Cryptocurrency markets are volatile, and investing involves risk. Always do your own research and consult a financial advisor.