DeFi has struggled with "capital efficiency" due to liquidity fragmentation across multiple siloed markets. Aave V3 used Isolation Mode and Portals to address this but remained market-based, isolating liquidity pools by blockchain or product type. Aave V4 fundamentally changes the architecture by introducing a Unified Liquidity Layer with a "Hub and Spoke" model. The Hub holds all assets, and independent Spokes define risk rules, allowing shared liquidity but isolated risk
