We have heard the feedback about the transition from Aave V3 to Aave V4. While we think it is important for the DAO to align strategically behind V4 as part of this proposal, the timeline is up for discussion. We will remove the timeline from the proposal and adjust the section accordingly.
Aave V3 is a battle-tested protocol, and it will continue to operate as a core part of the ecosystem for as long as the DAO decides it should.
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No changes to risk parameters, incentives, or capital efficiency are planned that would materially alter user behavior on V3.
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Existing incentive programs and planning around V3 markets will not be affected. Governance retains full discretion here.
If a V3 market serves a particular chain or ecosystem well, the DAO has the authority to keep it running indefinitely. As V4 gains its own track record, initiatives can move over progressively, at whatever pace the community is comfortable with. V4 also brings new use cases and opportunities that do not exist on V3, which we expect will drive adoption on its own terms. Similarly, partners can decide on their own time whether or not they want to migrate their ecosystem to V4 and coordinate with the DAO accordingly.
On liquidity fragmentation, every previous version transition at Aave has bootstrapped new liquidity successfully, and users have migrated organically over time as they moved toward better features and efficiency. We expect the same here and there will be no forced migration.
After V4 launches, we will release migration tooling so users can move positions at their own pace. One feature worth noting is V4’s reinvestment capability, which allows liquidity on V4 to be directed back into V3 markets (or other yield opportunities) if the DAO decides that is necessary. That creates a bridge between the two versions rather than a competition for deposits.
The sequencing for the V4 rollout is still to be determined by the DAO and will depend on risk assessments form service providers for each chain and use case. Ecosystems interested in early V4 adoption should work with their closest service provider partner on integration planning and connect directly with Aave Labs for a technical compatibility analysis.