Aave V4 changes Ether.fi Cash collateral

Ether.fi said Cash now has one card and five collateral types, with Aave describing the Cash credit backend as powered by Aave V4 on Optimism. The supported direction is clear from Ether.fi's help center and Aave's governance post: Cash is not only a prepaid spend product. It is becoming a collateral-backed spending account.

That can be useful if you want to keep assets while borrowing for card spend, but it also raises the discipline requirement. More collateral choices do not make a purchase cheaper. They change what sits behind the purchase.

Borrow Mode needs you to track collateral and LTV

For normal bills, Direct Pay is still the cleaner mental model: spend stable assets and finish the payment. Borrow Mode is different. You need to know which asset is collateral, what LTV applies, what interest accrues, and how repayment works after refunds or reversals.

The update makes Ether.fi Cash Card more flexible, especially for users already comfortable with DeFi collateral. It is not a better default for someone who wants a simple top-up crypto card.

Sources: ether.fi on X, Ether.fi collateral help, Aave governance proposal, and Optimism on Ether.fi.