Aave Labs vs. Aave DAO: Is the $50M Funding Request a Fair Trade for the Aave Brand?

Aave Labs Proposes Sending 100% Protocol Revenue to DAO Treasury Under New Governance Framework

Aave Labs has introduced a governance “temperature check” proposing that 100% of revenue from Aave-branded products be directed to the Aave DAO treasury.

The proposal, titled the “Aave Will Win Framework,” outlines a restructuring of revenue flows and intellectual property control in exchange for a new funding model to support Aave Labs’ ongoing operations and development.

Revenue to Flow Directly to the DAO

Under the framework, all revenue generated from:

• Aave v3

• The upcoming Aave v4

• Swap fees

• Frontend income from aave.com

• Future initiatives such as the Aave Card and a potential AAVE ETF

…would be redirected to the DAO treasury.

Currently, Aave v3 generates more than $100 million in annualized revenue, making the proposal financially significant for token holders.

Aave Labs also proposed establishing a new Aave Foundation to manage trademarks and intellectual property, formalizing brand ownership within a clearer governance structure.

Background: Governance Tensions

The proposal follows months of tension between Aave Labs and DAO participants over revenue control and brand governance.

In December, Aave Labs redirected swap fees from the official interface to a company-controlled wallet, triggering backlash from DAO members and leading to a failed governance proposal that attempted to transfer the firm’s intellectual property under DAO control.

Since then, CEO Stani Kulechov has reopened discussions around revenue sharing and structural reforms.

The move also comes amid a broader strategic shift at Aave Labs, including divesting non-core projects to refocus on decentralized finance.

Funding Request from the DAO

In exchange for relinquishing revenue streams, Aave Labs is requesting structured funding from the DAO:

• $25 million in stablecoins

  • $5 million upfront

  • $20 million streamed over one year

• 75,000 AAVE tokens, unlocked over two years

• Up to $17.5 million in additional grants for development and marketing initiatives

Proposed initiatives include Aave App, Aave Pro, Aave Card, and Aave Kit.

Aave Labs stated that annual budgets would require separate governance approvals, allowing token holders to oversee spending and performance metrics.

Launch of Aave v4 as Strategic Pivot

A central pillar of the proposal is the anticipated launch of Aave v4. The company says the new version will introduce a “hub-and-spoke” architecture designed to expand into additional markets and use cases, potentially unlocking new revenue streams.

If successful, the structure could significantly scale DAO-controlled income while formalizing a new operational relationship between the core development company and token governance.

Community Response

The proposal has already drawn criticism from prominent DAO contributors, including Marc Zeller of the Aave Chan Initiative, who described the funding request as excessive and raised concerns about transparency and governance process.

Debate is expected to intensify as the temperature check evolves into formal governance proposals.

Broader Implications

If approved, the framework could represent one of the most significant experiments in DAO-controlled brand and revenue management within decentralized finance.

The outcome may set a precedent for how core development teams and decentralized communities structure long-term economic alignment in major DeFi protocols.

Dimitar Todorov publication: "Aave Labs vs. Aave DAO: Is the $50M Funding Request a Fair Trade for the Aave Brand?" was written for 24crypto.news

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