Aave has launched three externally curated lending markets on Ethereum through Aave V4, with institutional DeFi firm Sentora managing collateral and loan terms. The markets let users borrow Ripple's RLUSD, PayPal's PYUSD and Origin's OUSD against specified crypto assets.
Aave governance keeps control of the contracts and oversees changes that could raise lender risk. Sentora described the launch on October 22 as V4's first governance-approved deployment under an external curator.
The new markets operate through Aave Pro, which provides access to curated lending products. Each market follows its own borrowing rules, although all three draw funds from one Sentora Liquidity Hub on Ethereum.
In the RLUSD Yield market, borrowers can use USDe, PRIME, mWIN or PST as collateral to obtain RLUSD. OUSD Yield accepts those same four assets but provides loans in OUSD.
The third market, Bluechip, accepts kBTC, a Bitcoin-backed asset, as collateral. It supports borrowing across all three stablecoins: RLUSD, PYUSD and OUSD. Sentora adjusts collateral limits, interest rate models, price feeds and liquidation rules for each market.
The firm's architecture also identifies a planned PYUSD Yield market. Sentora has not confirmed its collateral list, and that market does not form part of the three active offerings.
Previously, Sentora expanded RLUSD lending through Morpho. In August, it approved FXRP as collateral for an RLUSD vault, allowing holders to borrow against a bridged version of XRP.
Aave V4 organizes lending through connected Hubs and Spokes. The Hub stores assets available for loans and handles liquidity accounting, while each Spoke sets conditions for a specific market.
What allows several lending markets to share funds without merging borrowers' positions? Under V4, the Hub assigns limits to each Spoke, while that Spoke maintains separate records of collateral and debt.
As a result, borrowers can open positions in different markets without pooling their obligations. Each Spoke also applies its own collateral rules and liquidation thresholds. Emergency controls can restrict activity when risks arise.
Supply limits determine how much liquidity a Spoke contributes to the Hub. Borrowing limits restrict how much it can withdraw. Those controls apply alongside the individual market's collateral settings, interest rates and liquidation parameters.
Loan costs change with demand for available funds. Greater utilization generally lifts borrowing rates and the interest suppliers receive. V4 can also charge a higher rate when borrowers use collateral that carries greater risk.
Aave has already extended V4 lending to other asset classes. In September, it launched a Base market accepting seven Coinbase tokenized stocks as collateral for USDC borrowing. The market began with a $21 million borrowing cap.
During the same month, Aave Labs reported more than $1 billion in V4 deposits and $310 million in active loans.
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Sentora manages daily market settings, but Aave DAO owns the underlying contracts. The DAO also sets safeguards for external curators, limiting changes that could place lenders at greater risk.
Any adjustment that increases market risk must pass through a 48-hour timelock. Governance must also review new assets before curators add them to a market. Governance safeguards apply across external Hub arrangements, not solely to Sentora's three markets.
Sentora says its platform has allocated more than $2 billion across onchain strategies. The company also reports using more than 1,000 risk models within each strategy.
Its Risk Radar tool tracks economic risks at block level across more than 40 DeFi protocols and over 12 networks. Coverage now includes Aave V4's Sentora Hub and lending markets.
Elsewhere, Babylon Labs submitted an October 14 proposal for stablecoin loans backed by native Bitcoin held in Bitcoin-network vaults. The proposal still needs governance approval, final risk settings and security checks before launch.
Aave V4 now supports three Sentora-managed markets for RLUSD, PYUSD and OUSD borrowing on Ethereum. The shared Liquidity Hub connects the markets without combining individual loan positions. Sentora sets market risk terms, while Aave DAO controls contracts, reviews asset additions and enforces a 48-hour delay on risk-increasing changes.