Aave v4 and Lido v3 Spark Major DeFi Upgrades, 2026 Outlook!

Aave, Lido and Sky prepare major early‑2026 upgrades as Ethereum and Solana network changes loom and DAOs debate governance

  • Major DeFi protocols plan substantive upgrades in early 2026.
  • Aave is preparing a new architecture for customizable lending markets with a public testnet already active.
  • Lido plans a v3 launch to expand yield options and pursue real-world asset integration.
  • Sky (formerly Maker) aims to deploy AI agents to assist DAO delegates.
  • Network upgrades on Ethereum and Solana are expected to change finality and latency characteristics.

DeFi protocol teams and DAO communities are preparing major updates in early 2026 as U.S. policy takes a more hands-off stance and organizational roles blur. Aave developers have moved a v4 codebase and testnet into the public domain while teams address security findings, and proponents argue the upgrade will enable customizable lending markets without fragmenting liquidity, according to Aave Labs’ development update and a separate proposal on v4’s design.

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Aave describes v4 as significant, calling it “the most significant architectural evolution of the Aave Protocol since V1.” Some DAO members, however, have voiced caution about moving resources away from v3, which holds more than $34 billion in user deposits, as noted in a governance discussion.

Lido is readying Lido v3 to let users build tailored yield strategies on top of Ethereum staking and to regain market share through new asset classes and ETF integrations, as outlined in a Lido Labs proposal. The proposal states, “These shifts are transforming DeFi from an experimental playground into a real financial layer,” and adds, “The next growth wave will be driven by practical use cases such as treasury management, credit, and investment, where reliability, product flexibility, and capital efficiency become prerequisites for adoption.”

Sky (formerly Maker) lists multiple protocol improvements and plans to deploy AI agents to help DAO delegates, detailed in its agent framework roadmap and genesis phase roadmap. Developers on major chains are also progressing network work: Ethereum finalizes the scope of the Glamsterdam upgrade, while Solana prepares the Alpenglow upgrade to reduce block finalization latency.

Governance items this week include a Lido DAO discussion on fiscal transparency, a BNB Chain parameter update vote, and a Spark proposal on USDC deposit caps. “Ethereum was not created to make finance efficient or apps convenient. It was created to set people free,” wrote Vitalik on social media, as shown in his tweet.

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