The Aave governance fight, which started when Aave Labs redirected swap fees away 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 important 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 makes the DAO responsible for funding Aave Labs' activities, with a $25 million stablecoin grant and 5,000 AAVE token allocation approved.
The proposal resolves a dispute that exposed a deeper tension over whether Aave Labs or the DAO controlled the protocol's most valuable asset: its user-facing products and revenue. The Aave Will Win proposal decisively favors token holders, with protocol revenue supplemented by application-layer revenue from Aave Pro, Aave App, Horizon, and Aave Kit.
The application layer aims to target mainstream users with a 'fintech-like experience' and generate fees for the treasury. The proposal also takes a hard line against 'value leakage,' with service providers required to build exclusively for Aave.
Technical improvements include Aave V4's reinvestment feature and the introduction of 'Spokes' to expand collateral options. With roughly $25 billion in total value locked, Aave aims to scale from $40 billion to $1 trillion, positioning itself as a financial network for fintech, banks, and asset managers.