The prolonged governance battle that began 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 significant in Aave's history by its founder, has been approved, establishing a framework that redirects 100% of revenue from all Aave-branded products back to the DAO and consolidates economic rights under the AAVE token. This move shifts the responsibility of funding Aave Labs' activities to the DAO, 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, allowing token holders to vote on key decisions.
The 'Aave Will Win' proposal resolves a dispute 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 supplemented by application-layer revenue from various Aave products. The ambition lies in the application layer, with Aave App targeting mainstream users and generating fees for the treasury.
The proposal also addresses 'value leakage' by requiring service providers to build exclusively for Aave, with measurable goals and improved governance processes. Technical advancements, such as Aave V4's reinvestment feature and new 'Spokes', expand collateral options and address DeFi liquidity demand. 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.