- Aave Labs has proposed a two-part licensing framework for V4 repositories: a corporate source license and a contributor license agreement.
- The first would restrict commercial use of all core repositories for some time, while the second would allow the Aave DAO to use and modify contributors’ code.
Aave Labs has introduced a new proposal for a two-part licensing framework for V4 repositories that would expand the community’s contributions and provide greater clarity around the use of the repositories.
The Labs published a TEMP CHECK describing the new proposal. It suggests two frameworks: a Business Source License (BUSL) for the core V4 code, and a Contributor License Agreement (CLA) that extends to any developer contributing code to the network. A TEMP CHECK on Aave is a non-binding off-chain vote used to gauge how the community feels about a proposal before it goes up for an official vote.
Aave Labs proposes a two-part licensing framework for the canonical Aave V4 repositories.
Basically a BUSL-based license for the core codebase and a Contributor License Agreement (CLA) for anyone who wants to contribute to the codebase. pic.twitter.com/LXbPXE5fJy
— Aave (@aave) March 10, 2026
V4 is the latest version of the Aave protocol and is expected to be fully deployed this year, transitioning the DeFi network from V3, which it currently relies on. Under V3, the network adopted a BUSL licensing framework where the codebase was protected from commercial use for a period of time before becoming open source.
With V4, however, the network suggests a few changes. According to the Labs, one of the factors behind the changes is that significantly higher community contributions are expected than V3. Secondly, it attempts to provide clarity; under V4, each file in the repository will contain a small license ID in the header, indicating which license controls the code. Previously, a single license applied to the entire codebase.
Aave V4 preparations amid $27 million outage
Under the proposal, BUSL licensing provisions will not change from V3. The DAO will own the V4 codebase (the Labs currently hold the copyright on behalf of the DAO), which will become open-source on the modification date, which will be within five years of the launch date.
Users who wish to contribute code to V4 will have to accept the CLA, which gives the entire community the right to access the code they contribute. This gives the community “a consistent, irrevocable right to use, incorporate, and sublicense their contribution as part of the canonical codebase,” says the TEMP CHECK.
The proposal comes on the same day that Aave users suffered $27 million in liquidations due to an outage that affected wstETH’s oracle price. According to blockchain analysts, the protocol has not created any bad debts, but some users with healthy positions have been unfairly liquidated.
The mishap is blamed on Chaos Labs, Aave’s main risk management provider, whose system lowered the wstETH/stETH ratio, making the price of wstETH appear lower than it actually was. This led to users’ collateral values falling and some positions falling below the liquidation threshold, despite actually being in healthy positions.
Chaos Labs founder Omer Goldberg acknowledged the error and revealed that all affected users would be fully reimbursed.
1/ steTH CAPO Wrong configuration
Today, a misconfiguration of Aave’s CAPO oracle caused wstETH E-Mode liquidations, resulting in a loss of 345 ETH.
No bad debts have been incurred and all affected users will be fully refunded.
More below.
— Omer Goldberg (@omeragoldberg) March 10, 2026
Aave has been rocked by infighting among its leadership groups, with BGD Labs and Aave Chan Initiative announcing they would be leaving within months. They both blamed the Labs for their departure.