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

Odaily Planet Daily reports that Aave officially announced on its X platform that since its inception, Aave has processed nearly 295,000 liquidations, totaling over $3.3 billion. These liquidation protection protocols safeguard against bad debts, maintaining system health. In light of this, Aave V4 introduces a redesigned and optimized liquidation mechanism based on the V3 liquidation mechanism. Its main advantages include:

1. Introduce dynamic liquidation thresholds and automated auction mechanisms to reduce manual intervention and improve liquidation speed and capital efficiency;

2. By integrating on-chain oracles and MEV (Miner Extractable Value) protection, the risk of slippage and manipulation during the liquidation process is reduced;

3. Supports partial liquidation and batch processing, allowing borrowers to avoid full liquidation at a lower cost.