How to Choose Aave V3 vs V4 Pro for Borrowing in DeFi (Crypto School Live Training)
Aave is the largest lending and borrowing platform in DeFi, and most people who use it think of it primarily as a place to borrow against crypto they already hold. Right now there are two versions live at the same time: the familiar V3, and the newer V4, which Aave labels "Pro." If you land on the homepage, click "Use Aave," and get asked to pick one, this session walks through what actually changes between them — and what stays exactly the same.
Siloed Pools vs. One Liquidity Hub
The structural difference is simple. In V3, assets are siloed: there is one pool per market. Everyone borrowing USDC pays the same variable rate. At the time of this training, that rate was 4.05% for USDC and 3.67% for USDT. You don't choose anything — you take the asset and you take the rate.
V4 Pro routes through one shared liquidity hub that pulls from many pools. That's why the interface shows a range of rates instead of a single number. Borrowing USDC displayed a base APY range of roughly 0.46% to 14.12%, and those numbers move frequently. Inside a specific market like Blue Chip Prime, the rate was 2.54% — noticeably cheaper than V3 — because that pool had almost all of its deposits already borrowed.
The wording changes too. V3 says "supply." V4 says "deposit." Same action.
Utilization Is the Number That Matters
Each V4 pool shows an interest rate model chart with an optimal utilization point, often around 92%. Below that line, rates climb gradually as more capital is borrowed. Above it, rates can spike hard, because nearly everything in the pool is lent out and withdrawals become difficult.
This is where pool depth becomes the deciding factor. V3 holds over $2 billion in supplied USDC with nearly $2 billion borrowed — very deep liquidity. V4 showed around $20 million. A shallow pool means a single large borrow can push utilization from 50% to 90% quickly, dragging your rate up with it. If you wanted to draw a million dollars from a pool holding $500,000, it simply isn't there. Understanding how lending and borrowing protocols set rates in DeFi makes these charts far less intimidating.
LTV and Liquidation Don't Change
Whichever version you use, three numbers govern the position: max loan-to-value, liquidation threshold, and the liquidation penalty. A 75% max LTV means $100 of collateral allows $75 borrowed. Cross the 78% liquidation threshold and the position is liquidated — plus a 4.5% penalty on top.
Because collateral is crypto, its value can drop fast. Staying well below max LTV, adding collateral when prices fall, or paying down the loan are the three levers. A personal rule from this session: borrow stablecoins only. Borrowing volatile crypto means you may owe back far more than you took. These are the same risks that come with using DeFi protocols regardless of protocol version, and the same logic applies when you borrow against Bitcoin as collateral.
One practical follow-up: borrowing, repaying, and liquidations all create transaction records that need to be reconciled at year end. Count On Sheep is worth a look if you want help filing crypto taxes across DeFi wallets and lending positions, since on-chain loan activity rarely imports cleanly into generic tax software.
The Verdict for Now
V4 Pro may win on rate if you post blue-chip collateral like ETH or BTC, at least while pools are small. But small pools are also more likely to hit high utilization and reprice against you. V3 has the deepest liquidity and the most predictable single rate.
The conclusion from this training: stick with V3 for borrowing for now, keep an eye on V4 Pro, and consider V4 for lending on an asset-by-asset basis where yields are higher. Not financial advice — do your own research.
If you want to walk through an Aave position live and ask questions as you build it, the Crypto School community runs training five days a week at 12:00 ET, and you can join the live DeFi sessions and course library at skool.com/crypto-profit.
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