AL Development Update | February 2025

Development
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GM, Aave community!

Aave Labs has continued to make steady progress on the Aave V4 development in line with our service provider scope. Below is a summary of what has been done over the past month, as well as what is coming in the next 30 days.

February update:

  • Continued Aave V4 development.
  • Executed GHO expansion to Base.
  • Hardened security of Aave V3 on Aptos.
  • Progressed Aave Interface V4.
  • Integrated Aave V3.3 (feat Umbrella) into the Aave Interface.
  • Integrated Linea market into the Aave Interface.
  • Supported ongoing integrations.

Aave V4 Updates

Development on Aave V4 has been progressing consistently since June, with the most recent efforts focused on implementing the Spokes and consolidating the Liquidity Premiums. Below you will find the details of the advancements made in the last month.

Spokes

Aave Labs has made significant progress on the core architecture of Spokes and its integration with the Liquidity Hub. The development efforts concentrated on implementing the main methods, the interest accrual workflows and the Risk Premium calculations. While at the same time, implementing fuzz tests to analyze edge cases of round direction and dust accumulation, with the objective of identifying potential accounting imbalances.

Liquidity Premiums

Testing of the Liquidity Premium algorithm continued consistently throughout the month to validate the different assumptions and adapt its behavior based on the results. The team ran simulations to identify precision loss mitigations and analyze how the Liquidity Premiums respond under extreme scenarios over different time periods, assessing the resulting impact on the user positions. At the same time, research is progressing on possible implementations of a scenario testing engine that will help strengthen the protocol resiliency.

What else are we working on?

GHO Expansion to Base

The GHO expansion to the Base network was completed successfully, marking a significant advancement in GHO’s multi-chain presence and further expanding its accessibility within the DeFi ecosystem. Simultaneously, efforts continued in collaboration with the Chainlink team to activate GHO as a gas fee token in the CCIP implementation of Base.

Aave V3 on Aptos

The Aave V3 codebase on Aptos is now final, boasting 100% test coverage on both the Move smart contracts and the dedicated Typescript SDK. This milestone confirms its robustness by validating that every component performs as expected. The codebase is now being subject of internal reviews while preparations progress towards the mainnet release.

Likewise, the Certora audit is progressing steadily, and Aave Labs is starting an additional audit with Spearbit. In parallel, the in-house built custom fuzzer was successfully implemented and is now continuously running. This tool actively scans the codebase to identify potential vulnerabilities, already providing valuable insights and laying a strong foundation for ongoing security.

Interface

Aave Interface V4

The engineering of the new Aave Interface V4 continues with substantial progress in designing new visibility controls and consolidating the user interface. While maintaining alignment with the upcoming Aave V4 requirements, the team has continued both front-end and back-end work, establishing the foundation for an improved user experience in the next generation of the protocol.

Aave V3.3 (feat Umbrella)

Aave V3.3 was successfully integrated, with Umbrella now fully incorporated across the Aave Utilities SDK, the Aave Interface, and the Aave Interface helper contracts. The integration marks a significant milestone in enhancing the protocol’s safety module infrastructure.

Aave V3 on Linea

Aave Labs has successfully integrated Linea into the Aave Interface. The implementation encompasses all necessary components and utilities, providing users with a complete and cohesive experience for managing their positions on the Linea network.

Ongoing Integrations

Updates on the Aave Interface related to tokens and community incentive programs, such as the integration of the Ethena Merit Campaign, resolution of general bug fixes, and implementation of minor feature enhancements.

What’s coming next?

Our main focus for the coming month will be

  • Progressing the development of Aave V4.
  • Continuing the security effort associated with Aave V3 on Aptos.
  • Activating GHO as a fee token in the Base implementation of CCIP.
  • Continuing GHO expansion to more networks.
  • Integrating Sonic network into the Aave Interface.

Stay tuned for next month’s update.

Aave Labs

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2

While this isn’t in direct relation to this update I would like to know something.
Will Aave v4 have a better mechanism and smoother experience for existing user to switch from v2/v3 to v4?
In the past it was and actually still is hard to get user from V2 to v3. There is still a substantial amount of active loans on V2 and it took years to get the majority over to v3.
If we consider v4 is the best Aave iteration ever, this process is crucial. Otherwise we will have the same problem again for several years. There must be ways or incentives to move loans easily from one version to another. Obviously risk has to be a crucial part of it by rasing caps fast, etc.

And btw thanks for the update.

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Thanks @EzR3aL for bringing this subject up.

Once Aave V4 gains more lindy effect, migration tools and incentives can be used to move liquidity, based on the DAO’s decision. We envision that in the future, there will be no need for liquidity migrations as Aave V4’s modular architecture allows for easier improvements without requiring full migrations.

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