Aave Labs seeks Avalanche launch for V4 with up to $15 million in incentives

Why Avalanche is being proposed

According to the proposal, Aave V4 is moving into its next expansion phase by targeting networks that already show DeFi demand, existing Aave activity, and a realistic route to protocol revenue. Aave Labs said the first V4 deployment on Ethereum Mainnet served as a production test of the protocol’s Hub-and-Spoke design, and described an Avalanche rollout as the next logical step.

The proposal points to Avalanche’s history as an Aave V3 deployment since 2022 and says the network has built a record across liquidations, oracle performance, and periods of market stress within the Aave ecosystem. Aave Labs argues that Avalanche’s established liquidity, user base, and existing distribution lower execution risk for a V4 activation.

Proposed market structure

The initial Avalanche setup would include an Avalanche Core Hub and three connected Spokes. The Core Hub would list wAVAX, sAVAX, BTC.b, USDC, USDT, wETH.e, and EURC.

Under the draft structure, the Main Spoke would allow both collateral and borrowing for WAVAX, BTC.b, USDC, USDT, wETH.e, and EURC. A separate AVAX Correlated Spoke would use sAVAX and WAVAX as collateral, with WAVAX available to borrow. A Forex Spoke would focus on EURC, USDC, and USDT for both collateral and borrowing.

Aave Labs also said a dedicated real-world asset hub is expected to be introduced later through a separate follow-up proposal, rather than as part of the initial launch.

Incentives and open parameters

The Avalanche Foundation has committed up to $15,000,000 in incentives, according to the ARFC. The package is milestone-based and linked to Hub launches as well as growth KPIs, with the stated goal of helping bootstrap V4 markets on Avalanche.

Some elements of the deployment are still not final. The proposal says the specification section will be updated after feedback from stakeholders, while initial token listings and risk parameters are also expected to change based on updated risk analysis.

Governance process from here

The proposal follows the passage of a TEMP CHECK Snapshot and now enters the next phase of Aave governance. Aave Labs said the immediate steps are to collect community feedback and receive risk analysis from LlamaRisk.

After that, the proposal would move to the ARFC Snapshot stage. If that vote returns a YAE outcome, Aave governance would then advance the matter to an AIP vote for final confirmation and enforcement.

The filing also includes a disclosure that Aave Labs is not receiving compensation from Ava Labs for making the proposal or for any potential deployment on Avalanche. It says Aave Labs is presenting the plan as a service provider to the Aave DAO under its approved scope of work.

The proposal does not finalize the deployment on its own, but it lays out the intended launch architecture, asset scope, oracle direction, incentives framework, and the sequence of governance steps required before Aave V4 could go live on Avalanche.