The prolonged governance dispute that commenced 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 passed, 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 shift implies that the DAO will now be responsible for funding Aave Labs' activities, with a $25 million stablecoin grant and 5,000 AAVE token allocation approved for 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-run decision-making body for the protocol. The 'Aave Will Win' proposal has resolved a dispute that emerged in December when delegates noticed that the integration of CoWSwap into Aave's interface had quietly shifted swap-related fees away from the community treasury. This controversy exposed a deeper tension over whether Aave Labs or the DAO controlled the protocol's most valuable asset: its user-facing products and the revenue they generate. The proposal decisively favors 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 sits, 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 hard line against 'value leakage,' with service providers required to build exclusively for Aave, with zero tolerance for relationship gating or products built for themselves at the expense of token holders. Every service provider will have measurable goals, and governance process improvements are 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 that did not exist in V3.
New 'Spokes' expand collateral options and address the demand side of DeFi liquidity. The team also plans 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. The $140 million annual revenue figure puts it alongside Uniswap and Lido as one of the few protocols generating nine-figure income.
The stated target is scaling from $40 billion to $1 trillion, positioning Aave not as a bank but as 'a financial network that any fintech, bank, or asset manager can plug into.'