The prolonged governance battle that commenced when Aave Labs diverted swap fees 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, consolidating 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. Aave DAO, a governance system managing the Aave lending protocol, enables token holders to vote on decisions such as upgrades, fees, and treasury use, serving as the community-driven decision-making body for the protocol.
The 'Aave Will Win' proposal has been passed with a landslide, outlining the future plan: Aave will become fully token-centric, with one asset and one model - $AAVE. The vote resolves a dispute that surfaced 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 'Aave Will Win' proposal decisively favors token holders, with protocol revenue, which reached $140 million in 2025 and is expected to match that in 2026, 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 lies, 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, having measurable goals, and governance process improvements planned to reduce politics and friction. Technically, 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, with 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, with a $140 million annual revenue figure positioning it alongside Uniswap and Lido as one of the few protocols generating nine-figure income. The 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.