The most trusted financial network. Earn, borrow, save, and swap.
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Aave retweeted
Episode 250: Will Aave Eat Wall Street? with Luigi D'Onorio DeMeo of Aave Labs
@alextapscott @luigidemeo @aave @CMCC_Global
0:00 Introduction
3:48 Leaving Avalanche and landing at Aave
7:17 From ETHLend to the largest lending protocol in crypto
11:16 $80B in deposits, no back office
12:12 How overcollateralized lending works and why people borrow
15:49 Why Celsius and BlockFi blew up and Aave didn't
18:46 What's being built on top of Aave
21:12 Life after CLARITY, and the cost of uncertainty
23:55 Does uncertainty advantage the risk-tolerant?
26:20 Why stablecoins cut at the heart of the bank model
29:29 Deposit insurance as a taxpayer subsidy
31:22 Fintech as digital wallpaper and why that's ending
33:34 Moving loans off balance sheets and onto Aave
37:23 The DTCC and the next killer app
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Aave retweeted
Aave V4 myths
“Aave V4 doesn't isolated markets.”
No. Aave V4 hubs and spokes are isolated by default based on their risk profiles. Risk-adjusted markets can share liquidity through hubs, up to defined caps, supporting new use cases without unnecessarily fragmenting liquidity.
Full liquidity isolation is often counterproductive: it fragments capital, reduces utilization, and increases costs for users. These trade-offs become even more visible when incentives used to bootstrap isolated liquidity eventually run out.
“Hub-and-spoke fragments liquidity.”
It’s the opposite.
In V4, spokes represent lending markets, while hubs can share liquidity across those markets. This allows isolated risk profiles to access pooled liquidity, improving utilization and capital efficiency.
“It’s just isolated markets. Aave is catching up with curated vaults.”
A curated vault typically launches with zero liquidity and requires capital or incentives to bootstrap.
A V4 spoke can launch with the entire hub balance sheet behind it from day one.
That’s the difference between an isolated market and an isolated risk profile with access to pooled liquidity.
“V4 is complex.”
The architecture is simpler while remaining flexible enough to support a wide range of use cases. The overall codebase is also significantly smaller than Aave V3.
“V4 is still a new deployment. It’s too early to use.”
V4 is already securing $1.2B in deposits and is deployed across multiple networks, including Ethereum, Avalanche, and Arc.
V4 is already scaling.
“V4 is less open to curators.”
V4 already supports third-party curators such as EtherFi, with more to come.
The key difference is that curators can build and manage an entire market structure, rather than simply manage deposits inside a vault. This gives them the opportunity to participate in the economics of the broader lending market instead of being limited to fees on deposit AUM.
Over time, curators and integrators should be able to own more of their market structure and retain more of the economics they create.
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Aave retweeted
I always get most excited about Aave App when user deposits come directly from bank accounts into Aave.
We’ve crafted the experience so users can link their bank account to Aave, deposit fiat, and have it automatically converted 1:1 into stablecoins.
Every bank transfer feels like one step closer to mainstream adoption.
I’m happy of what we’ve built with the team so far, but we’re still in beta. We’re focused on polishing every part of the experience and expanding our onramp capabilities globally.
I believe we have one chance to get this right, so we’re putting a lot of focus on the last mile. The small details matter when you’re building for mainstream users.
Really excited to launch soon and onboard as many friends as I can.
This is the first onchain experience we’ve built that passes our famous “fintech test.”
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Learn more about Aave App here: aave.com/app
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