The prolonged governance battle 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 proposal. The 'Aave Will Win' proposal, deemed the most significant in Aave's history by founder Stani Kulechov, has been approved, establishing a framework that redirects all 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 approved proposal including a $25 million stablecoin grant and 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 decisions such as upgrades, fees, and treasury use, effectively acting as the community-driven decision-making body for the protocol. The 'Aave Will Win' proposal has passed with a significant majority, outlining a roadmap for the future: Aave will become fully token-centric, with one asset and one model - $AAVE.
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 resolves the dispute in favor of token holders, with protocol revenue now supplemented by application-layer revenue from Aave Pro, Aave App, Horizon, and Aave Kit. Swaps on Aave.com and Aave Pro are already generating $10 to $20 million in additional revenue on top of existing protocol fees.
The application layer is where the ambition lies, with Aave App targeting mainstream users with a 'fintech-like experience' and a card launching later that generates fees for the treasury. The proposal takes a firm stance against 'value leakage,' with service providers required to build exclusively for Aave, and governance process improvements planned to reduce politics and friction.
On the technical side, Aave V4's reinvestment feature turns idle float capital in lending pools into yield-generating positions, creating an additional revenue stream. New 'Spokes' expand collateral options and address the demand side of DeFi liquidity, with the team planning to invest in agentic AI infrastructure for developers building on Aave.
Aave holds roughly $25 billion in total value locked across multiple chains, making it the largest lending protocol in DeFi, with a stated target of scaling from $40 billion to $1 trillion and positioning Aave as a financial network that any fintech, bank, or asset manager can plug into.