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 proposed framework. The 'Aave Will Win' proposal, deemed the most significant in Aave's history, has been passed, establishing a framework that redirects 100% of revenue from Aave-branded products back to the DAO and consolidates economic rights under the AAVE token. This shift implies that the DAO will now be responsible for funding Aave Labs' activities, with the proposal approving a $25 million stablecoin grant and a 5,000 AAVE token allocation to Aave Labs.
The Aave DAO, a governance system managing the Aave lending protocol, enables token holders to vote on crucial decisions such as upgrades, fees, and treasury use. The 'Aave Will Win' proposal marks a significant milestone, as it decisively resolves the dispute in favor of token holders, with protocol revenue now being supplemented by application-layer revenue from various Aave products.
The proposal aims to prevent 'value leakage' and ensures that service providers build exclusively for Aave, with measurable goals and improved governance processes. The technical aspects of the proposal include Aave V4's reinvestment feature, which generates additional revenue streams, and the introduction of 'Spokes' to expand collateral options. With roughly $25 billion in total value locked, Aave is poised to scale from $40 billion to $1 trillion, positioning itself as a comprehensive financial network.