The prolonged governance dispute 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, 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. As a result, 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 governance system that manages the Aave lending protocol, enables token holders to vote on key decisions. The 'Aave Will Win' proposal marks a significant shift, making Aave fully token-centric, with one asset and one model: $AAVE. This move 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 answers the question of whether Aave Labs or the DAO controls the protocol's most valuable assets, favoring token holders.
With protocol revenue reaching $140 million in 2025 and projected to match that in 2026, the supplemented application-layer revenue from Aave Pro, Aave App, Horizon, and Aave Kit will further boost the treasury. Swaps on Aave.com and Aave Pro are expected to generate an additional $10 to $20 million in revenue. The application layer is where the ambition lies, with Aave App targeting mainstream users with a 'fintech-like experience' and a card launch that will generate fees for the treasury. The proposal takes a firm stance against 'value leakage,' with service providers required to build exclusively for Aave, with no tolerance for relationship gating or products built 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 will turn idle float capital in lending pools into yield-generating positions, creating an additional revenue stream. New 'Spokes' will 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. With roughly $25 billion in total value locked across multiple chains, Aave is the largest lending protocol in DeFi, generating $140 million in annual revenue. The stated target is to scale from $40 billion to $1 trillion, positioning Aave as a financial network that any fintech, bank, or asset manager can plug into.