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Aave V4 separates liquidity hubs from spokes, improving scalability and isolating risk across markets.
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Spokes manage user actions and can be updated, allowing flexible risk settings without altering core liquidity hubs.
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Credit lines link hubs and spokes, setting borrowing caps per asset to control exposure and manage liquidity access.
Aave V4 launched on Ethereum in late March 2026, introducing a new liquidity structure built around hubs, spokes, and credit lines. The redesign changes how assets move across markets and how risk is managed. According to Aave documentation, the system separates liquidity storage from market logic to improve efficiency and scalability.
Liquidity Hubs Define Capital Structure
To begin with, Aave V4 organizes liquidity through dedicated smart contracts called hubs. These hubs hold user-supplied assets and track total deposits and loans. Each hub maintains its own balance sheet, which remains independent from others on the network.
Notably, hubs cannot be upgraded after deployment, which limits changes to core accounting logic. However, governance can still register new assets within a hub. Each asset receives a unique identifier for tracking across connected markets.
At launch, three hubs operate on Ethereum, including Core, Prime, and Plus. Each one serves different borrowing strategies. As a result, liquidity remains segmented while still accessible across multiple markets.
Spokes Handle User Interactions
While hubs store assets, spokes manage all user-facing activity. Users interact with spokes to supply, borrow, repay, or withdraw funds. Each spoke defines its own rules, including collateral requirements and liquidation thresholds.
Importantly, spokes can be updated over time. This allows governance to adjust risk parameters without altering hub contracts. In addition, a single hub can support multiple spokes simultaneously, each with distinct configurations.
For example, a spoke may allow specific assets as collateral while restricting others. As a result, each market operates under its own risk profile while drawing liquidity from shared hubs.
Credit Lines Connect Hubs and Spokes
To link these components, Aave V4 introduces credit lines between hubs and spokes. Each credit line sets a borrowing limit for a specific asset. Therefore, a spoke can only draw liquidity up to its assigned cap.
These limits apply per asset and per hub connection. For instance, borrowing USDC and USDT creates separate credit lines, each with independent caps. The hub enforces these limits on every transaction.
Moreover, a single spoke can access multiple hubs through different credit lines. This setup allows flexible liquidity access while maintaining strict controls. As a result, governance can adjust exposure by increasing or reducing these caps when needed.
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