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

Odaily Planet Daily reports that Aave officials posted on the X platform stating that since its establishment, Aave has processed nearly 295,000 liquidations with a total amount exceeding $3.3 billion. These liquidations protect the protocol from bad debt impacts and maintain system health. In view of this, based on the V3 liquidation mechanism, Aave V4 introduces a redesigned optimized liquidation mechanism. Its main advantages include: 1. Introducing dynamic liquidation thresholds and automated auction mechanisms to reduce manual intervention, improve liquidation speed and capital efficiency; 2. Lowering slippage and manipulation risks during liquidation by integrating on-chain oracles and MEV (Miner Extractable Value) protections; 3. Supporting partial liquidation and batch processing, allowing borrowers to avoid full liquidation at lower costs.