Understand the numbers · Aave V4 basics

Why V4 borrowing costs can differ

Read base rates, risk premiums, weights, and the threshold without mixing them up.

4 sections Beginner friendly

Start with the base rate

The Hub sets a base borrowing rate for an asset. The rate can respond to market supply and demand. It is a starting point for understanding costs, not necessarily the complete cost of ur position.

Aave V4 risk premiums

What a risk premium adds

V4 can charge additional borrowing interest based on collateral risk. The premium is related to base interest accumulation; a percentage shown as a premium is not automatically that many percentage points added to a headline APY.

For ur action, read the displayed borrowing rate and the preview’s Risk premium after. Avoid treating an asset risk score, a position premium, and a final APY as interchangeable.

Aave V4 risk premiums

Read the collateral breakdown

Portfolio lists tokens contributing to the position’s risk-premium breakdown. It shows their collateral share and protocol-reported current and latest weights. These explain inputs to the position; they are not separate invoices.

Current and latest values can differ. Read them as the values supplied for that position and the latest reported setting, not as a guaranteed change that will happen at a particular time. This site has no manual premium-update action.

What the threshold actually controls

The risk-premium threshold limits a Spoke’s ratio of premium shares to drawn shares for an asset in a Hub. In everyday terms, it limits the Spoke’s premium exposure relative to its base borrowing exposure.

It is not the point where ur own borrowing starts to incur extra interest. u do not enter or change it in the transaction form. Use it as market configuration context; use the position preview to review ur proposed action.

Aave V4 Hub configuration

Words in this guide

Full glossary

APYAnnual percentage yield: Annual percentage yield: a rate expressed over one year with compounding included. It is not a guaranteed return.
Base borrow rateBase rate: The Hub's starting borrowing rate for an asset, before any position-specific risk premium.
Collateral: Eligible supplied assets enabled to support borrowing. These assets can be taken during liquidation if the position no longer meets its requirements.
Collateral riskCollateral risk weight: A protocol-assigned weight used in calculating borrowing premiums. It is not a probability of losing money or a final interest rate.
HubHubs: The part of Aave V4 that manages shared liquidity and accounting. Connected Spokes use that liquidity under the Hub's limits.
Portfolio: The selected account's supplied positions and debt on the markets covered by this explorer.
PositionPositions: An account's supplied assets and debt within a market. One account can have separate positions in multiple Spokes.
Protocol: The set of contracts and rules that runs a service such as Aave. The explorer is an interface for reading data and requesting actions from those contracts.
Risk premiumRisk-premium: Additional borrowing interest linked to collateral risk. A premium percentage scales base interest accumulation; it is not automatically that many percentage points of APY.
Risk premium after: The estimated risk premium for the position after the action u are previewing.
Risk-premium threshold: A Hub limit on a Spoke's premium exposure relative to its base borrowing exposure. It is not the point where ur loan starts charging extra interest.
SpokeSpokes: A market connected to Hub liquidity, with its own rules for user positions. Users supply and borrow through Spokes.
TokenTokens: A digital asset recorded on a blockchain. Check the specific asset and network before entering an amount.
TransactionTransactions: A signed request processed by the blockchain, such as supplying tokens or granting an approval. Review its receipt to check whether it succeeded.

Start with the base rate

What a risk premium adds

Read the collateral breakdown

What the threshold actually controls

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