Aave's V4 deployment on Circle's Arc blockchain is live with a dedicated dollar-euro lending market operating alongside a broader crypto-backed market, with both drawing funds from the same liquidity hub. The rollout went live on Sept. 16 with support for $USDC, $EURC, wrapped Ether (WETH) and Circle's wrapped Bitcoin, cirBTC. Circle, which issues both $USDC and $EURC, also operates Arc, placing the two currencies at the center of the deployment under the same issuer that runs the chain.

The practical distinction between the two markets lies in collateral. The Forex market allows users to pledge either $USDC or $EURC to borrow the other. Arc's Main market accepts $USDC, WETH and cirBTC as collateral, but not $EURC, according to the deployment configuration. The setup gives euro-token holders a route to dollar borrowing without selling their $EURC.

Activity has been building since launch. Aave said on Oct. 12 that its Arc deployment had crossed $300 million in deposits. Arc highlighted the markets in an Oct. 15 walkthrough featuring Kolten of Aave, and onchain logs show the Core Hub processing supplies and borrowing through the Main market on Oct. 15.

Two Markets, One Liquidity Source

In V4, users interact with borrowing modules called spokes. These modules send deposits to a hub and draw loans from it, while maintaining separate collateral settings and limits. Aave's documentation describes this as a departure from V3's market-per-pool design: connected markets can now use shared liquidity rather than each requiring a separate deposit base. In Arc's case, that let the dollar-euro pair share liquidity with the larger crypto-backed market from launch day rather than needing to grow a dedicated pool of its own.

Arc launched with one Core Hub and two borrowing markets. All four launch assets are borrowable in Main, while Forex is limited to $USDC and $EURC. Separate supply-only tokenization spokes turn deposits into positions that external vaults and aggregators can use, without enabling borrowing through those integrations.

The launch configuration adopted token-denominated supply and borrowing limits set by LlamaRisk. For Main, those were 56 million $USDC supplied and 51 million borrowed; 20 million $EURC supplied and 18 million borrowed; 1,100 cirBTC supplied and 220 borrowed; and 24,000 WETH supplied and 4,800 borrowed. Forex's initial limits were 13 million $USDC supplied and 11 million borrowed, plus 10 million $EURC supplied and 9 million borrowed. LlamaRisk cited limited secondary-market liquidity for $EURC as the reason for the conservative Forex caps. These figures are launch limits, not a current reading of remaining capacity. Once a cap is reached, further supplies or borrows in that asset are blocked, making the ceilings a natural yardstick for tracking how Arc's usage develops from here.

Ethereum's own V4 deployment also uses shared hub liquidity and has a Forex Spoke listed in Aave's contract directory. The Defiant previously reported on Arc's contribution to V4's September growth.

Arc also carries network-level controls relevant to borrowers. In its prelaunch technical assessment, Aave Labs said $USDC is Arc's gas asset and that an freeze can stop an address from transacting altogether. Its tests found that a frozen borrower's position could still be repaid or liquidated by a third party. For borrowers, that places issuer policy alongside collateral settings among the controls that can bear on a position on the network.