The prolonged governance battle that commenced when Aave Labs redirected swap fees from the DAO treasury has come to an end, with the community voting in favor of the proposal. The approved 'Aave Will Win' framework redirects 100% of revenue from all Aave-branded products back to the DAO, consolidating economic rights under the AAVE token. This significant shift means 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.
The 'Aave Will Win' proposal has put an end to the controversy surrounding the integration of CoWSwap, which had quietly shifted swap-related fees away from the community treasury. The proposal decisively favors token holders, with protocol revenue supplemented by application-layer revenue from Aave Pro, Aave App, Horizon, and Aave Kit. Swaps on Aave.com and Aave Pro are generating an additional $10 to $20 million in revenue.
The application layer aims to provide a 'fintech-like experience' with $1 million account protection per user and a card launching later, generating fees for the treasury. The proposal addresses 'value leakage' by requiring service providers to build exclusively for Aave, with measurable goals and improved governance processes. Aave V4's reinvestment feature and new 'Spokes' expand collateral options, addressing the demand side of DeFi liquidity.
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.