Aave Labs announced on its intent to share revenue generated outside the core Aave Protocol with AAVE token holders. This move follows weeks of internal debate within the Aave community regarding the distribution of value from commercial products, particularly those expanding into real-world assets and institutional users. The decision aims to address concerns about value capture and governance alignment, signaling a strategic shift for one of the largest decentralized finance (DeFi) protocols.
On , Aave Labs stated its plans to propose a structure for sharing non-protocol revenue with its token holders. This announcement came after a period of intense discussion within the Aave DAO (Decentralized Autonomous Organization) concerning whether commercial ventures developed by Aave Labs sufficiently benefited the broader ecosystem and AAVE token holders.
Aave founder Stani Kulechov emphasized the protocol had reached a crossroads
, suggesting that an exclusive focus on crypto-native lending might restrict long-term growth, especially as traditional finance entities increase their engagement with blockchain technology. The upcoming proposal is also expected to include specific guardrails around branding and intellectual property (IP) usage, aiming to prevent the dilution or monetization of the Aave name without adequate oversight from token holders.
The dispute within the Aave community intensified as Aave Labs expanded beyond traditional DeFi lending into new sectors like real-world assets (RWAs) and consumer-facing applications. While these initiatives are designed to attract institutional capital and new users, critics within the DAO raised questions about governance, branding, and the equitable distribution of revenue.
A central point of contention was whether application-layer products, developed by Aave Labs without a clear mechanism to return value to AAVE token holders, were extracting value without sufficient benefit to the token’s economic role. The debate also touched upon intellectual property rights, with delegates seeking clarity on the control of branding and technology when products are built by commercial entities rather than directly by the DAO. This was exacerbated by a recent contentious governance vote that rejected a proposal to transfer control of Aave’s brand assets and IP to its DAO.
The decision by Aave Labs to share non-protocol revenue is a direct response to community pressure for greater alignment between the development team’s commercial activities and the interests of AAVE token holders. Stani Kulechov noted that achieving this alignment is crucial for Aave to scale beyond its current crypto-centric use cases and tap into opportunities such as the estimated $500 trillion RWA market. Aave Labs maintains that the DAO should not directly fund or operate consumer products due to the capital intensity, regulatory complexities, and the speed required to compete with traditional financial platforms.
Instead, the protocol is intended to remain open and permissionless, allowing independent teams to build products that drive usage and revenue back to the core infrastructure. According to Blockchain Council, the governance model should be designed to reflect the organization’s values and goals
, highlighting the importance of this alignment for decentralized organizations.
The specific details of the revenue-sharing structure, including the percentage of revenue to be shared and the exact timeline for implementation, have not yet been disclosed. Furthermore, the precise mechanisms for the proposed IP guardrails and their enforcement within the decentralized framework remain undefined.
Aave Labs is expected to submit a formal governance proposal outlining the specific mechanics of the revenue-sharing model and IP protections. This proposal will then be subject to a vote by AAVE token holders, determining the future relationship between Aave Labs and the Aave DAO. The market reacted positively to the initial announcement, with AAVE price experiencing a jump.
AAVE token holders should monitor the Aave governance forums for the upcoming formal proposal from Aave Labs. Review the proposed revenue-sharing structure and IP guardrails carefully once they are published. Engage in the community discussion and participate in the governance vote to express their preferences on the future direction of the Aave ecosystem.
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