Aave to introduce new liquidation model in V4 upgrade

Crypto lending protocol Aave (AAVE) announced it has introduced a new liquidation mechanism in its upcoming V4 upgrade. Unlike the previous system, which used a fixed ratio for liquidations, the new version only liquidates the amount necessary to restore a borrower's Health Factor to a stable level. The upgrade also features a variable bonus system where liquidation rewards increase based on position risk. Additionally, the protocol is improved to allow for the one-time clearance of small residual debts or collateral, known as "dust," to enhance capital efficiency, and to lower gas fees.