Aave has launched its first externally curated V4 markets on Ethereum, with Sentora taking charge of strategy and risk management. According to Sentora's October 22 announcement, the new markets support borrowing for RLUSD, PYUSD, and OUSD, all within a governance-approved framework. Sentora oversees collateral rules, risk parameters, interest-rate curves, and oracle configurations, effectively handling the practical aspects of lending conditions while Aave governance maintains oversight.
The V4 structure divides Aave into hubs and spokes. Hubs serve as the central settlement layer, while spokes are specialized smart contracts for collateral, borrowing, and liquidation logic. This setup allows different markets to share liquidity while applying distinct conditions. Governance controls the capacity allocated to each spoke, with credit and supply limits ensuring controlled activity across markets.
For borrowers, the identity of the market is crucial, as two markets on the same protocol can offer different assets, borrowing capacity, and liquidation conditions. Suppliers must weigh income against market rules, considering which borrowers can access liquidity and the potential risks if collateral values decline.
Sentora has also expanded its Risk Radar to monitor the V4 structure, providing tools to compare caps against usage and track borrowing concentrations. The system includes a governance tracker for changes to assets and parameters. Sentora highlights that a spoke reaching its borrowing cap cannot draw additional funds until capacity is freed through repayment or an approved increase.
The launch introduces a new layer of complexity for DeFi users, requiring careful assessment of the curator’s collateral choices, market capacity, and the protocol’s design. While monitoring tools can highlight differences, they cannot prevent losses from unsuitable collateral policies. This rollout marks a live test of the division of responsibilities between Sentora, Aave, and governance.