Aave

**Arbitrum community reaches quorum on ETH release** Over 1,600 addresses representing 190+ million ARB tokens voted to unfreeze ETH held by Arbitrum DAO following the April 18 rsETH bridge exploit. The vote passed with strong delegate approval, marking progress for the DeFi United recovery initiative. **Key developments:** - Attacker's rsETH positions liquidated on Aave (Ethereum and Arbitrum) - Liquidated collateral now held by Recovery Guardian - No other users affected during liquidation process - Frozen ETH would support efforts to restore rsETH backing **Background:** The rsETH incident began April 18 when Kelp DAO's bridge was exploited. Aave froze rsETH markets across multiple chains and WETH reserves to contain exposure. Multiple protocols including Lido, EtherFi, Ethena, and LayerZero committed to the DeFi United recovery fund. The Arbitrum governance proposal requested release of Security Council-frozen ETH to advance restoration of rsETH's full backing and normalize market conditions. [View snapshot vote](https://snapshot.org/#/s:arbitrumfoundation.eth/proposal/0xb32581468bece42245fa267ea86156a621ae77f61bb866118189b5d50155b051/discussion)

Aave V4 continues its measured expansion by **increasing supply and borrow caps** across multiple assets in response to growing deposit inflows. This adjustment follows the protocol's **security-first growth strategy**, which prioritizes gradual scaling as the system matures. The protocol previously surpassed $10 million in deposits during its initial growth phase in April 2026. **Key points:** - Supply and borrow caps raised across several assets - Changes accommodate increasing user deposits - Maintains focus on security while scaling The cap increases represent a continuation of Aave's cautious approach to growth, balancing user demand with protocol safety as V4 establishes itself in the market.

Aave has increased the **USDe supply cap to 100 million** on its MegaETH market, responding to strong demand. **Key details:** - USDe by Ethena is now available on the market - Caps are filling quickly, indicating high user interest - USDm incentives are currently live on the same market This expansion follows a pattern of Aave adjusting supply caps based on utilization rates. Previously, the protocol raised USDS supply caps to 200M after reaching 100% utilization for multiple days. The move provides more capacity for users looking to supply USDe on the MegaETH market.

Aave has launched **Aave Pro**, a new interface for interacting with Aave V4 Protocol. **Key features include:** - Earning and borrowing capabilities - Token swapping functionality - Position monitoring tools The interface is now available at [pro.aave.com](https://pro.aave.com/) This follows the V4 testnet launch in November 2025, which included a developer preview of the Pro interface. The full announcement details are available on the [Aave blog](https://aave.com/blog/aave-v4-live-ethereum). Aave Pro provides users with a streamlined way to access V4's liquidity protocol features through a web-based interface.

A new audit contest is available on Sherlock's platform. Security researchers and auditors can participate in **Contest 1209** to identify vulnerabilities and earn rewards. - Contest accessible at [Sherlock platform](https://audits.sherlock.xyz/contests/1209) - Open for community participation - Part of ongoing security review process This follows previous contest activity, indicating continued focus on protocol security through community-driven auditing.

**Aave V4** has entered its **open security review phase** on Sherlock DeFi, marking a key milestone in the protocol's development. The review invites participation from: - Previous Aave auditors - Developers familiar with lending-pool mechanics - Security researchers interested in DeFi protocols This follows Aave Labs' September roadmap announcement, which outlined the final stages before V4's launch including public documentation, testnet deployment, and codebase release. The open review represents a **community-driven approach** to protocol security, allowing experienced auditors to contribute to one of DeFi's most significant upgrades.

**MetaMask's mUSD stablecoin** has been listed on Ethereum Core and Linea Build markets, expanding lending options for users. - Users can now **supply and borrow mUSD** on both platforms - This marks continued expansion for mUSD, the first stablecoin from a self-custodial wallet - Previously announced integration with Linea ecosystem for seamless on-ramps and swaps The listing provides new **DeFi lending opportunities** with MetaMask's native stablecoin across multiple networks.

**Aave has processed over $3.3 billion in liquidations** since launch to protect its lending protocol from bad debt. The DeFi protocol published a detailed blog post introducing **V4's new liquidation engine** and explaining improvements over the current V3 system. - Liquidations serve as a critical safety mechanism for lending markets - V4 aims to enhance the liquidation process with new technical improvements - The upgrade represents Aave's continued focus on protocol security Read the full technical breakdown: [Aave V4 Liquidations Blog](https://aave.com/blog/aave-v4-liquidations?utm_source=x&utm_medium=post&utm_campaign=liquidations)

**Aave V4 transforms DeFi lending** with a revolutionary architecture that unifies liquidity across markets. **Key Innovation: Hubs and Spokes** - Hubs store liquidity pools - Spokes implement custom lending rules and market logic - Multiple markets can draw from the same liquidity source **Benefits for Users and Builders:** - Enhanced capital efficiency across all markets - Specialized markets can access deep liquidity from day one - Custom lending parameters without liquidity fragmentation **Real-World Applications:** - Pendle markets accepting multiple PTs as collateral - Uniswap LP-focused lending markets - Shared ETH liquidity across different use cases **Strategic Impact:** V4 positions Aave as DeFi's operating system, enabling previously unviable markets while maintaining security and efficiency. This architecture supports the migration of global finance onchain by serving specialized needs without sacrificing liquidity depth. [Read the full unified liquidity thesis](https://aave.com/blog/aave-v4-unified-liquidity-thesis)

**Aave V3 is now live on Plasma**, a high-performance blockchain designed specifically for stablecoins. **Initial asset support includes:** - USD, USDe, sUSDe - XAUt (gold-backed token) - WETH and weETH The deployment was handled by BGD Labs on behalf of Aave DAO, with comprehensive risk analysis from Chaos Labs and Llama Risk. **Chainlink provides price feeds** for secure operations. Plasma's focus on scalability and stablecoin infrastructure makes it a strategic addition to Aave's multi-chain presence. Supply and borrow caps are detailed in the [governance proposal](https://governance.aave.com/t/arfc-deploy-aave-v3-on-plasma/21494). Users can access the new market through the [Aave app](https://app.aave.com/markets/?marketName=proto_plasma_v3) immediately.