RIADeFiPublished by Ketju Research
Not approved · Dollar lending

Ketju memo: Aave v4

Not approvedPublished by Ketju Research

This memo sets out what the holder owns, who controls it, how holders could lose money, and whether a position can be sold. The advisor decides any client action and amount. Not investment, legal, tax, or compliance advice.

Summary

Ketju does not approve Aave v4: it has run for only months, and each of its three Hubs must build its own history of liquidations and withdrawals before we can judge it. We found no flaw in the design. Aave v4 launched on Ethereum in March 2026 with three separate Liquidity Hubs (Core, Prime and Plus) and ten initial Spokes. It went through roughly 345 cumulative days of security review, paid for by a $1.5M DAO budget. A Hub owns and prices pooled liquidity. Spokes set the rules for collateral, borrowing, liquidation and risk premiums. Every Spoke on one Hub shares that Hub's assets, so bad debt from one badly set Spoke falls on the same Hub's liquidity. Caps on adds and draws limit that loss but do not isolate it. Ketju will review v4 again when a Hub meets the production tests in the review triggers below.

Review triggers

  • Ketju reviews a named Hub and asset again only after at least 12 months of production history and one liquidation above 1% of that Hub's TVL with no bad debt or withdrawal impairment
  • A withdrawal of the proposed size must execute from the exact Hub and asset below 50 basis points while trailing-30-day utilization stays below 90%
  • Every connected Spoke, per-asset add cap, draw cap, liquidation setting, pause authority and inter-Hub credit line must be reproducible from executed governance and live contracts
  • Any Spoke draw cap above 10% of its Hub's liquidity in the same asset, or any inter-Hub credit line without a published loss boundary, blocks a new review
  • Any core exploit, Hub bad debt, failed withdrawal of the proposed size, or unaudited upgrade to a Hub, Spoke, oracle or configurator withholds approval
  • Ketju reviews the migration again when v3 liquidity falls below two times v4 liquidity on the same chain and asset; protocol-wide TVL ratios do not count
  • Ketju reviews the Equities Hub and the Coinbase Tokenized Stock file together if a weekend or holiday gap of more than 10% opens between the held Chainlink price and the stock’s next open, a corporate-action pause lasts longer than one trading day, or a liquidation of a tokenized stock on Base clears more than 5% below the stock’s last print

Facts

Verdict
Not approved
Type
Dollar lending
Chains examined
Ethereum, Base, Arbitrum, Avalanche
Instruments
USDC, USDT, WETH, WSTETH, GHO, USDG, FRXUSD
Reviewed
Last confirmed

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