Aave v4 Deposits Hit $85M on Ethereum, Doubling in One Month

The milestone comes less than two months after Aave v4 launched on Ethereum mainnet on March 30, 2026. Growth has been driven by the protocol’s new Hub-and-Spoke architecture, live deposit incentives, and a deliberate security-first rollout with conservative supply and borrow caps.

Aave founder Stani Kulechov celebrated the $75 million supply mark on May 21. Just four days later, deposits crossed $85 million.

How the Hub-and-Spoke Architecture Works

Aave v4 replaces the fragmented liquidity model from V3. In V3, each market and chain had its own isolated pool. New markets had to attract fresh deposits from scratch. This created liquidity fragmentation across the protocol.

V4 introduces a unified Liquidity Hub that holds all supplied assets in one shared pool. Specialized Spokes then act as user-facing modules with their own collateral rules, risk parameters, and liquidation engines. All Spokes draw from and return capital to the same Hub.

Think of the Hub as a shared bank vault. Each Spoke is a customized teller window. Users deposit once, and their capital becomes available across every window. Governance can add new Spokes or adjust risk settings without splitting or migrating capital.

According to Aave v4 documentation, the system launched with three Liquidity Hubs on Ethereum: Core Hub, Plus Hub, and Prime Hub. A Main Spoke handles the primary lending market. The full list of contract addresses is publicly available on Etherscan.

Why Aave v4 Deposits Are Growing Fast

The architecture directly explains the deposit growth. New specialized markets, such as those targeting institutional users or real-world assets, inherit liquidity from the Hub instantly. They do not need to bootstrap deposits from zero.

Live incentives on assets like frxUSD and USDG also attract capital. These rewards give depositors additional yield on top of the base lending rate. The combination of shared liquidity and targeted incentives creates a strong pull for new deposits.

At the same time, Aave Labs took a conservative approach to launch. The official blog announcement on March 30 stated: “All three Hubs launch with conservative supply and borrow caps. This is 100% intentional as we take a security-first approach to scaling up Aave V4’s deposit base.”

The DAO has since gradually increased those caps based on observed on-chain behavior. Each cap increase opens more room for deposits to flow in.

Aave v4 Deposits in Context

While $85 million is significant growth for a two-month-old deployment, it remains a small fraction of Aave’s total TVL. DefiLlama data shows Aave v3 on Ethereum alone holds approximately $11.1 billion. The broader Aave protocol sits at roughly $14.3 billion across all chains.

Aave v4 deposits currently represent less than 1% of total protocol TVL. The gap highlights how early the V4 rollout remains, even as the growth rate looks strong.

On the token side, AAVE trades at approximately $87 as of May 25. The price has ranged between $83 and $98 over the past month, down about 6% from $93 at the start of May. Trading volume remains elevated at $136 million to $185 million daily, according to CoinGecko. No material price reaction to the V4 deposit milestone has occurred yet.

Community Reaction and Sentiment

On X, reactions to the Token Terminal data are positive. Users describe the deposit doubling as a strong early signal for V4 adoption. One user wrote that “deposits doubling fast on Eth V4” reflects growing confidence in the new architecture.

Stani Kulechov’s posts about V4 milestones have drawn hundreds of likes and engagement from DeFi insiders. No meaningful bearish pushback has appeared. The dominant narrative across crypto social media frames V4 as “finally gaining real traction after a conservative launch.”

No tier-1 outlets such as CoinDesk, The Block, or Bloomberg have published dedicated coverage of the $85 million milestone yet. The Token Terminal tweet is only hours old. DefiLlama and Dune Analytics dashboards remain the primary on-chain data sources for tracking Aave v4 TVL.

Open Questions for Aave v4

Several unknowns remain. The exact share of growth from V3 migration versus net new capital is unclear. Depositors moving funds from V3 to V4 would inflate the growth figure without representing truly new capital entering the Aave ecosystem.

The asset-type breakdown across Aave v4 deposits is also not publicly available. Whether stablecoins, blue-chip tokens, or real-world assets dominate the deposit base could shape the protocol’s risk profile.

Incentives on frxUSD and USDG may be temporarily inflating deposit numbers. If growth is primarily yield-driven, retention could dip once those rewards taper. Long-term sustainability depends on organic demand for V4’s specialized lending markets.

On the security front, V4 underwent extensive audits, formal verification, and a security contest with more than 900 participants. No exploits or security incidents have occurred since launch. Still, new smart contract deployments carry inherent risk until they accumulate more time and usage in production.

This article is for informational purposes only and does not constitute financial advice. Always do your own research before making investment decisions.

What Comes Next for Aave v4

The immediate focus is on governance-driven cap increases. As the DAO raises supply and borrow limits, more capital can enter V4 markets. The pace of those increases will shape the next leg of deposit growth.

New Spoke deployments could also accelerate adoption. Each Spoke targeting a specific use case, such as institutional lending or e-mode strategies, inherits Hub liquidity on day one. That removes the cold-start problem that slowed earlier Aave versions.

For depositors and DeFi participants, the Aave governance forum and Token Terminal’s Aave dashboard offer the best real-time tracking of V4’s growth trajectory.