Aave Labs Seeks $50M Grant to Redirect Product Revenue to DAO Treasury

Aave Labs has proposed a $50 million grant to route all product revenue to the Aave DAO treasury, reshaping its governance and revenue model amid community debate.

Aave Labs Seeks $50M Grant to Redirect Product Revenue to DAO Treasury

Aave Labs has proposed a $50 million funding initiative that could redefine how the decentralized finance pioneer manages and distributes its income. The company aims to channel all product-level revenue directly into the Aave DAO treasury, marking a significant structural shift in its long-term governance and economic framework.

The proposal outlines a plan to grant up to $42.5 million in stablecoins, complemented by 75,000 Aave tokens currently valued around $8 million. In return, all fees generated by Aave’s ecosystem including platforms such as aave.com, Aave Pro, Aave App, Aave Card, Aave Kit, and Aave Horizon — would flow straight to the DAO.

A New Economic Model for Aave

If approved, the $50 million package would transform how Aave Labs operates by transitioning it to a DAO-funded model. Of the total, $25 million would be allocated as an upfront primary grant, while an additional $17.5 million would be tied to product milestones, disbursed gradually as new services launch.

Aave Labs has pitched this framework as a step toward a more sustainable and token-aligned ecosystem. The initiative also introduces a long-term technical foundation, Aave V4, which will serve as the backbone for future upgrades. In addition, a new foundation would be established to safeguard and manage the Aave brand.

Founder Stani Kulechov described the proposal as an evolution toward a “token-centric” organization. He emphasized that redirecting product revenue to the DAO would empower the community to decide how funds are deployed whether to support innovation, initiate buybacks, or finance growth programs.

Community Pushback Over Governance and Token Distribution

The proposal has not been without criticism. Some community members, including Marc Zeller of the Aave Chan Initiative, have raised concerns over the size of the funding request and its implications for DAO governance. Zeller noted that the $50 million figure represents a considerable portion of the DAO’s treasury, suggesting that such a large commitment warrants greater scrutiny.

He called for breaking the package into multiple smaller proposals, separating issues like funding, revenue sharing, and the ratification of Aave V4. Zeller also pushed for clearer definitions of revenue streams and independent verification of product income to ensure transparency.

Particularly controversial was the inclusion of 75,000 Aave tokens in the grant. Since these tokens carry voting power, their allocation could potentially consolidate influence within certain hands. Zeller argued that any entity receiving DAO tokens should publicly disclose wallet holdings to avoid conflicts of interest.

While some voices expressed skepticism, others took a more balanced stance. DeFi analyst DefiIgnas described the initiative as a reasonable compromise, stating that it aligns incentives between Aave Labs and the broader DAO community, though he too advocated for more clarity on governance implications tied to the token allocation.

Aave Labs Proposal Comes After a Rejected Governance Vote

The current move follows a failed governance proposal in December, when tokenholders voted against transferring control of Aave’s intellectual property and branding to a DAO-managed entity. That decision exposed divisions within the community regarding the decentralization of the protocol’s brand assets.

In early January, Stani Kulechov outlined a broader strategy to expand beyond decentralized finance lending, signaling a renewed focus on non-protocol revenue streams. The new $50 million proposal formalizes those ambitions, combining several governance and operational changes into a single roadmap.

Before any funds are released, the proposal must pass through multiple governance stages. The initial “Temp Check” vote, which measures community sentiment, has already begun. If the signal vote garners adequate support, the proposal will advance to binding on-chain voting, after which disbursements would be implemented gradually.

Toward a DAO-Driven Future

Aave Labs’ $50 million plan represents more than just a funding request it is a pivot toward deeper decentralization and a clearer alignment between revenue generation and tokenholder governance. By routing all income from its expanding suite of financial products into the Aave DAO treasury, the firm seeks to empower the community to shape its own financial future.

If successful, this initiative could set a precedent for how decentralized finance organizations evolve from founder-led teams to fully DAO-supported ecosystems. However, the path forward will likely depend on whether tokenholders view this sweeping change as an opportunity to strengthen community control or as a consolidation of influence disguised as reform.

Disclaimer: Parts of this article were generated with the assistance from AI tools and reviewed by our editorial team to ensure accuracy and adherence to our standards.