Aave Labs has formally introduced a new strategic framework to the Aave DAO titled “Aave Will Win,” marking a decisive moment in the protocol’s governance journey.
The proposal arrives two months after tensions surfaced between Aave Labs and DAO contributors regarding value accrual, tokenholder rights, and long term product direction.
At its core, the framework seeks to resolve structural ambiguity, align incentives between equity stakeholders and tokenholders, and ensure that future product revenue flows entirely to the DAO. If approved, it could redefine how Aave positions itself for the next phase of onchain finance.
A Structural Reset for Aave v4 and the DAO
The proposal centres on three key pillars. First, it asks the DAO to formally ratify Aave v4 as the core foundation for future development.
Second, it outlines a funding and growth framework designed to position Aave at a global financial scale.
Third, and perhaps most significantly, it formalises a model in which 100% of revenue generated by Aave branded products, including those built by Aave Labs, would flow directly to the DAO treasury.
This is not a minor governance adjustment. It represents a structural reset. For context, Aave has long operated as a leading decentralised lending protocol, commanding more than 50% of the total lending market and amassing over $52 billion in cumulative net deposits.
Its position at the top of decentralised lending is not in dispute. What has been debated, however, is how value created by the ecosystem should accrue and who ultimately benefits from product expansion.
The issue came into sharper focus in December, when Ernesto Boado, former chief technical officer at Aave Labs, publicly questioned aspects of tokenholder rights and value capture.
That episode sparked a broader conversation within the governance forum about whether the DAO was sufficiently protected in its relationship with Labs and whether product layer value was properly aligned with tokenholders.
The “Aave Will Win” framework appears to be a direct response to that debate. Under the new model, Aave Labs would operate explicitly as a long term contributor to the DAO, rather than as a semi independent entity whose incentives may diverge.
According to Stani Kulechov, founder of Aave Labs, the framework establishes a token centric structure in which product revenue is directed fully to the DAO treasury.
In practical terms, this means that any growth achieved through Aave branded products strengthens the collective treasury, reinforcing the DAO’s strategic capacity.
This approach attempts to eliminate ambiguity around value accrual. Instead of parallel tracks of equity and token based value, the proposal seeks to anchor everything to the DAO.
At a time when decentralised governance is being tested across multiple ecosystems, this is a significant signal. It acknowledges that decentralisation is not only about voting mechanics, but about economic alignment.
Competing at a Global Financial Scale
Beyond governance mechanics, the proposal is forward looking in its ambition. It frames the next decade as a decisive period for onchain finance, particularly as fintech firms and institutions begin to engage more seriously with decentralised infrastructure.
Kulechov argues that Aave must position itself to compete at a global financial scale. This is not simply about incremental upgrades. It is about ensuring that Aave v4 becomes the foundational infrastructure for a new wave of financial products and integrations.
In that context, directing 100% of product revenue to the DAO is also a competitive strategy. A stronger treasury enables more aggressive ecosystem development, research funding, liquidity incentives, and cross chain expansion.
It gives the DAO flexibility to respond to market shifts without relying excessively on external capital. However, optimism is not universal.
Some prominent delegates have expressed scepticism. Marc Zeller of the Aave Chan Initiative publicly dismissed circulating rumours of major changes, commenting that there was “nothing positive on the short term.”
It remains unclear whether his remarks were directed at this specific framework or at broader market expectations.
Nonetheless, the reaction highlights an important tension within decentralised governance: long term structural reforms do not necessarily translate into immediate token price catalysts.
That tension is particularly relevant given the performance of the AAVE token over the past year. Despite Aave’s dominance in lending, its native token has fallen alongside much of the altcoin market and is down 56% over the last twelve months.
Market conditions have weighed heavily on governance tokens, especially those whose value accrual mechanisms are perceived as indirect or unclear.
This proposal attempts to address that perception head on. By explicitly tying product revenue to the DAO treasury, the framework strengthens the narrative that AAVE is not merely a governance tool but a claim on a growing protocol economy.
Whether that ultimately translates into market repricing depends on several factors, including implementation details, treasury management decisions, and broader crypto market conditions.
It is also worth noting that decentralised protocols are increasingly competing not only with one another, but with fintech firms and even traditional financial institutions exploring onchain rails. In such an environment, clarity of structure and speed of execution matter.
If Aave can align Labs and DAO under a coherent growth framework, it may reduce internal friction and accelerate product development. Governance clarity can be a strategic advantage when institutional counterparties are evaluating infrastructure partners.
At the same time, tokenholders will likely scrutinise the specifics. How will funds be allocated? What safeguards exist? How is long term accountability enforced? A proposal of this scale requires not just vision but operational precision.
Conclusion
The “Aave Will Win” proposal represents more than a governance update. It is an attempt to resolve past tensions and define Aave’s economic architecture for the next decade.
By formalising a token centric model in which 100% of product revenue flows to the DAO, Aave Labs is signalling a commitment to alignment and long term collaboration.
Whether the market views this as a turning point will depend on execution and broader conditions. For now, the debate reflects a maturing ecosystem, one increasingly focused on sustainable value accrual rather than short term narratives.