Aave will update the liquidation engine in version V4, introducing optimizations such as dynamic liquidation thresholds and automated auction mechanisms

Aave officially announced on platform X that since its inception, Aave has processed nearly 295,000 liquidations, amounting to over $3.3 billion. These liquidations protect the protocol from bad debt and maintain system health. In light of this, based on the V3 liquidation mechanism, Aave V4 introduces a redesigned and optimized liquidation mechanism.

Its main advantages include:

1. Introduction of dynamic liquidation thresholds and automated auction mechanisms, reducing manual intervention and improving liquidation speed and capital efficiency;

2. Reduction of slippage and manipulation risks during the liquidation process through the integration of on-chain oracles and MEV (Miner Extractable Value) protection;

3. Support for partial liquidations and batch processing, allowing borrowers to avoid full liquidations at a lower cost.