Aave Labs Moves To Transfer 100% Of Revenue To DAO In Funding Proposal

TLDR

• Aave Labs proposes sending all product revenue to the DAO treasury
• The firm requests $25M in stablecoins and 75,000 AAVE tokens
• A new Aave Foundation would manage trademarks and IP
• V4 launch may lead to gradual winddown of V3 protocol

Aave Labs has proposed sending 100% of its protocol revenue to the Aave DAO treasury in exchange for structured funding. The plan seeks to reshape the relationship between the company and token holders while supporting future development.

The proposal, presented as a non-binding temperature check, introduces what Aave Labs calls the “Aave Will Win Framework.” The framework would redirect all revenue from Aave-branded products to the DAO and create a new foundation to manage intellectual property.

Revenue Transfer and Structural Changes

Under the proposal, revenue from Aave v3 and the upcoming v4 would flow directly to the DAO. This includes swap fees, frontend earnings from aave.com, and future business lines such as the Aave Card and a potential AAVE ETF.

Aave Labs also plans to establish a new Aave Foundation. The foundation would hold trademarks and other intellectual property. This move would shift brand ownership closer to the DAO structure.

The company stated that the framework would center token holders as core beneficiaries of the protocol. It also said that revenue streams unlocked by v4 would increase the DAO treasury over time.

However, the proposal has drawn criticism from some DAO members. Marc Zeller of the Aave Chan Initiative questioned the structure and scale of the funding request.

“I want to cut through the attempted gaslighting now,” Zeller wrote. He argued that the request could be framed as extracting value from the DAO.

Funding Request and Payment Structure

In exchange for transferring revenue, Aave Labs is seeking funding from the DAO. The request totals $25 million in stablecoins and 75,000 AAVE tokens.

The company asked for $5 million upfront. It also requested $20 million streamed over one year. The 75,000 AAVE tokens would unlock monthly over two years.

In addition, Aave Labs requested three separate $5 million grants. These grants would support the Aave App, Aave Pro, and Aave Card. Another $2.5 million was requested for Aave Kit.

Aave Labs noted that it has historically self-funded product expansion. The proposal states that the requested funding reflects an expanded operational scope. The company said each annual budget would require a separate governance vote.

Governance Tensions and Past Disputes

The proposal follows months of tension between Aave Labs and the DAO. Disputes intensified after swap fees from the official interface were redirected to a company-controlled wallet.

A token holder later proposed a takeover plan to acquire Aave Labs’ intellectual property. That proposal failed during a governance vote. Still, it triggered renewed discussions about revenue sharing.

Zeller described the current proposal as substantial. He stated that it was presented without prior coordination with the DAO. “Let’s be honest about where we are,” Zeller wrote. “Labs is acting as if it can impose outcomes regardless of governance process.”

The debate reflects broader questions about control and ownership within decentralized projects. Aave remains one of the largest decentralized lending protocols in the market.

Aave V4 Rollout and Future Direction

A key element of the framework is the launch of Aave v4. The new version has been in development for several years. Aave Labs said v4 introduces a hub and spoke model.

This model allows separate markets with different risk settings and revenue structures. The company expects new revenue streams under this design.

Aave v3 has generated over $100 million in annualized revenue. The proposal suggests a gradual winddown of v3 after v4 launches. Parameter changes may encourage users to migrate.

Aave Labs said a separate governance proposal will address v4 activation and launch details. The current temperature check aims to measure DAO support for the broader framework.

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