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Aave V4 introduces a restructured liquidity model built around three core components—Hubs, Spokes, and credit lines—designed to explain how liquidity moves across the protocol and how risk is managed across different markets. The architecture represents a clear shift from previous Aave versions, emphasizing modularity and upgradeability in lending infrastructure.
A Liquidity Hub in Aave V4 is a smart contract that holds deposited assets. For example, when a user supplies USDC, those tokens are stored directly inside a Hub. Each Hub tracks both how much of every asset has been supplied and how much has been borrowed across all markets connected to it.
As noted by crypto researcher @0xKolten, Hubs are intentionally immutable, meaning their underlying code cannot be modified after deployment. This is intended to keep the liquidity layer stable over time and reduce the risk of bugs introduced through upgrades. New assets can still be registered through governance, but adding an asset is treated as a state change rather than a code change.
On a single blockchain network, multiple Hubs can operate independently, each maintaining its own balance sheet. The current Ethereum deployment launched with three Hubs: Core Hub, Prime Hub, and Plus Hub. These Hubs do not share accounting with one another.
Spokes are the contracts users interact with directly. Supplying, borrowing, repaying, and withdrawing all occur through a Spoke. Each Spoke includes its own market logic, such as collateral factors, price feeds, and liquidation rules.
Unlike Hubs, Spokes are upgradeable. This allows governance to adjust risk parameters without changing the Hub layer, keeping liquidity custody stable while enabling market-level changes.
Connections between a Spoke and a Hub are defined through credit lines, with each credit line set per asset. For instance, if a Spoke borrows USDC from a Hub and also borrows USDT from the same Spoke and Hub, those are two separate credit lines. Each credit line has its own draw cap, which the Hub enforces before processing transactions.
The draw cap functions similarly to a borrow cap in Aave V3. Governance can raise a draw cap to expand access or lower it to reduce the Spoke’s exposure. Setting a cap to zero stops new borrowing while leaving existing positions intact.
The Bluechip Spoke on Prime Hub illustrates how a Spoke can connect to multiple Hubs at once. In this setup, users supply collateral such as WETH, wstETH, WBTC, and cbBTC into Prime Hub. The same Spoke also holds separate credit lines to Core Hub for stablecoins including USDC, USDT, and EURC.
When borrowers draw stablecoins through the Bluechip Spoke, the liquidity comes from Core Hub up to each asset’s authorized cap. The tokens received are the underlying assets themselves, not synthetic versions.
This design gives Aave governance an asset-level tool to control how much liquidity a Spoke can access from a given Hub at any time. By separating immutable liquidity custody (Hubs) from upgradeable market logic (Spokes) and enforcing per-asset draw caps (credit lines), Aave V4 aims to manage risk while maintaining modularity across its lending markets.
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