Aave DAO Approves $25M Grant Despite Internal Pushback

Aave DAO has officially approved a US$25 million (AU$36.25 million) stablecoin grant and 75,000 AAVE tokens for Aave Labs after its first binding vote under the “Aave Will Win” framework passed with about 75% support.

The stablecoins fund one year of operations, and the AAVE tokens vest over 48 months. Additional milestone-based payouts tied to product delivery could push total funding above US$40 million (AU$58 million).

In return, Aave Labs will send 100% of product revenue to the DAO. This includes income from Aave.com, Aave App, Aave Pro, Aave Card, Aave Kit, and Aave Horizon. The agreement also requires the team to build only Aave-related products and publish quarterly reports on spending and performance.

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Revenue Trade-Off

The arrangement redirects an estimated US$10 million (AU$14.5 million) in annual swap fees that Aave Labs previously retained. 

The Aave protocol already generates over US$100 million (AU$145 million) yearly in revenue for the DAO, and the new framework consolidates all brand-related income under decentralised control.

Yet the definition of “revenue” became a flashpoint during debate. The proposal defines it as product revenue net of partner revenue sharing, rebates, and user incentives, deductions that critics argued could substantially erode the headline figure before it reached the treasury. 

How much would actually flow to the DAO under that formula remained a contested point throughout the governance process.

Marc Zeller, founder of the Aave Chan Initiative, published an audit of Aave Labs ahead of the vote, questioning accountability, wallet transparency, and measurable return on investment. ACI subsequently announced it would not seek contract renewal and would wind down operations over four months.

BGD Labs and Chaos Labs, both significant service providers to the protocol, also confirmed their departures amid the broader governance rift. 

The simultaneous exit of three major contributors raises questions about whether the US$33 billion (AU$47.85 billion) lending protocol can sustain its governance capacity and operational depth as development consolidates under a single funded entity.

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