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Aave V4 Risk Premium

Compute Aave V4 user risk premium from collateral risk values.

Updated Nov 5, 2025
Search Tags:#solidity#risk premium#aave v4#collateral risk#borrow rate#premium debt
One-click install
npx skills add https://github.com/cyotee/crane --skill aave-v4-risk-premium
Or copy as Structured Prompt for Agent▼
Please help me install this Agent Skill.
Skill: Aave V4 Risk Premium
Source: https://github.com/cyotee/crane/tree/main/.claude/skills/aave-v4-risk-premium
Command: npx skills add https://github.com/cyotee/crane --skill aave-v4-risk-premium

SYSTEM DOCUMENTATION & REQUIREMENTS

What problem does it solve?

Understand and reason about how collateral quality drives borrowing costs in Aave V4, enabling accurate pricing and risk assessment for lenders and borrowers.

Core Features & Use Cases

  • Collateral Risk modeling: interpret per-reserve collateral risk values to estimate premium impact on rates.
  • User Risk Premium calculation: compute RP_u as a weighted average of collateral risks across a user's collateral portfolio.
  • Premium accounting and debt composition: explain how drawn debt and premium debt are combined and how premium offsets work.
  • Practical scenarios: walk through step-by-step examples with multiple assets and debt levels to illustrate changes in RP and user rates.

Quick Start

Calculate the user risk premium for a hypothetical position with a given debt and mixed collateral using the Collateral Risk values described.

Frequently Asked Questions about Aave V4 Risk Premium

High-intent search queries and answers about installing and using this skill.

FAQPage Schema
How does the Aave V4 risk premium affect my borrow rate?▼

The Aave V4 risk premium adjusts your borrow rate based on collateral quality. It calculates a user-specific premium by weighting the collateral risk values of your specific asset portfolio, increasing borrowing costs for riskier collateral.

How do I calculate user risk premium for multiple collateral assets?▼

Calculate user risk premium by averaging the collateral risk values of all enabled assets in the position, weighted by their respective amounts. This yields a single premium rate applied to the user's total debt.

What is premium debt accounting in Aave V4?▼

Premium debt accounting in Aave V4 combines drawn debt with accumulated risk premium debt. It tracks how premium offsets work and how the total debt composition evolves alongside collateral risk changes.

When does Aave V4 update the risk premium?▼

Aave V4 updates the risk premium through a lazy update mechanism. This process refreshes the user risk premium and recalculates premium debt only when a state-changing action occurs, rather than continuously.

How does enabling or disabling collateral change my borrow rate?▼

Enabling or disabling collateral alters your portfolio's weighted average collateral risk. This directly shifts your user risk premium, causing your effective borrow rate to evolve based on the newly adjusted asset mix.

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