The prolonged governance dispute that began when Aave Labs diverted swap fees from the DAO treasury has come to an end, with the community voting in favor of the 'Aave Will Win' proposal. This proposal, deemed the most significant in Aave's history, establishes a framework that redirects 100% of revenue from all Aave-branded products back to the DAO, consolidating economic rights under the AAVE token. As a result, the DAO will now be responsible for funding Aave Labs' activities, with a $25 million stablecoin grant and 5,000 AAVE token allocation approved.
The Aave DAO, a community-run decision-making body, manages the Aave lending protocol, enabling token holders to vote on key decisions such as upgrades, fees, and treasury use. The 'Aave Will Win' proposal marks a significant shift towards a fully token-centric model, with the AAVE token at its core. The vote resolves a controversy that emerged in December when delegates discovered that the integration of CoWSwap into Aave's interface had quietly shifted swap-related fees away from the community treasury. The proposal decisively favors token holders, with protocol revenue, which reached $140 million in 2025, now being supplemented by application-layer revenue from Aave Pro, Aave App, Horizon, and Aave Kit.
The application layer is poised for growth, with Aave App targeting mainstream users with a 'fintech-like experience' and a card that generates fees for the treasury. The proposal also addresses 'value leakage' by requiring service providers to build exclusively for Aave, with measurable goals and governance process improvements planned to reduce friction. Technically, Aave V4's reinvestment feature will turn idle float capital into yield-generating positions, creating an additional revenue stream. New 'Spokes' will expand collateral options, addressing the demand side of DeFi liquidity, and the team plans to invest in agentic AI infrastructure for developers building on Aave.
With roughly $25 billion in total value locked, Aave is the largest lending protocol in DeFi, generating $140 million in annual revenue. The target is to scale from $40 billion to $1 trillion, positioning Aave as a financial network that any fintech, bank, or asset manager can plug into.