Aave V4 explained: hubs, spokes and risk premiums
Aave V4 replaces separate markets with shared hubs and lighter spokes, and adds a personal risk premium to borrowing. A plain-language guide to what changed.
Updated
Aave V4 is the newest version of the protocol. It runs next to Aave V3 rather than replacing it overnight, so both are live and both appear on this site. The big change is how liquidity is organised. V3 is a set of separate markets. V4 is built from two pieces: hubs and spokes.
Hubs: where the money sits
A hub is a shared pool of liquidity on one network. It holds the assets and sets each asset's base interest rate from how much of that asset is lent out, using the same kind of kinked curve as V3. If you know how Aave interest rates work, you already know how a hub prices borrowing.
The hub also keeps a small share of the interest, called the liquidity fee. It plays the same role as the reserve factor on V3.
Spokes: where you supply and borrow
A spoke is the part people actually use. It is the closest thing to a V3 market. Each spoke lists its own assets and has its own risk settings: which assets count as collateral, how much you can borrow against them, caps, and how liquidations work. A spoke does not hold its own separate pile of money. It draws liquidity from one or more hubs.
That is the point of the design. On V3, a new market starts with empty pools and has to attract deposits. On V4, a new spoke can plug into a hub that already has liquidity. It also means one token can appear twice on the same spoke, once for each hub it comes from, at two different rates.
| Aave V3 | Aave V4 | |
|---|---|---|
| Where you supply and borrow | A market | A spoke |
| Where liquidity sits | Inside each market | In hubs shared by many spokes |
| Who sets the interest rate | Each market, per asset | The hub, per asset |
| What a borrower pays | The market rate | The hub's base rate, plus a personal risk premium |
| Borrowing power setting | Max LTV and liquidation threshold | Collateral factor |
The risk premium
On V3 everyone who borrows an asset in a market pays the same rate. V4 adds a personal element. Every collateral asset on a spoke carries a collateral risk score. A borrower's risk premium depends on the collateral backing their loan: safer collateral means a lower premium, riskier collateral a higher one. The premium is charged on top of the hub's base rate.
This is why our V4 pages label the borrow figure as a base rate. It is the floor, not necessarily what every borrower pays.
Health factor and liquidations on V4
The basic rule is unchanged: if a loan's health factor falls below 1, it can be liquidated. Two details differ from V3. Borrowing power comes from a single collateral factor per asset. And each spoke sets a target health factor: a liquidation aims to bring the loan back to that target rather than repaying a fixed share of the debt, with the liquidator's bonus growing the further the loan has fallen. For background, read health factor explained and how liquidations work.
Where to see V4 on this site
- The Aave V4 overview lists every hub and spoke with live totals.
- V4 assets sit next to V3 ones on the stablecoin and best rates pages, marked with a V4 badge.
- The V4 USDC tracker records the exact average base rate for USDC, day by day.
- V4 liquidations lists the latest liquidations on every spoke.
V4 is young and its settings are still being tuned by Aave governance, so treat today's numbers as a snapshot. The official reference is Aave's documentation.
Common questions
What is the difference between a hub and a spoke on Aave V4?
A hub is a shared pool of liquidity that sets each asset's base interest rate. A spoke is where users supply and borrow, with its own collateral rules and caps, drawing its liquidity from one or more hubs.
Is Aave V3 going away now that V4 is live?
Both versions run side by side. Most of Aave's liquidity is still on V3, and this site tracks V3, V4 and the legacy V2 market on Ethereum.
What is the risk premium on Aave V4?
An extra charge on top of the hub's base borrow rate that depends on how risky the borrower's collateral is. Safer collateral means a lower premium. The scores behind it are set by Aave governance.
Why does the same token appear twice on one V4 spoke?
A spoke can draw the same token from two different hubs. Each hub sets its own rate, so the spoke lists the token once per hub.