Thanks for bringing up this topic, it is a very important discussion to have.
That said, this post seems more focused on overhauling the Friendly Fork Framework and L2 strategies, rather than providing a full “DAO-wide state of the union.” I do think the latter is equally important to address, as it would help frame priorities and direction more holistically.
In the early days, L2s played a critical role in onboarding users to Aave, especially when gas costs were prohibitively high. Today, I do believe L2s are important especially for more consumer adoption as it would be unfeasible to onboard users directly on mainnet. For instance, Base is currently onboarding the most users and showing the strongest growth in terms of user activity (not just TVL).
There are clear benefits in certain L2s like Arbitrum, Base, and Kraken from both a deal flow and growth perspective. While it is true that spinning up new L2 deployments comes with operational costs, I believe Aave as software should be able to deploy anywhere there is sufficient demand, ideally through a simple, low-cost deployment model that does not create ongoing financial strain on the DAO. The key challenge is how to do this safely, without reputational risk. This is where Aave V4 could be pivotal, enabling faster, safer deployments with built-in DAO revenue sharing and eliminating opportunities for frameworks to be gamed, as we have unfortunately seen with Spark. In practice, Spark has turned the “friendly fork” framework into a hostile one, which is unacceptable.
On the topic of instances, the problem lies in liquidity fragmentation. The current design does not ensure concentrated liquidity provisioning while maintaining risk segregation. Aave V4’s Hub and Spoke architecture could resolve this, with DAO-governed Hubs allocating credit lines to Spokes where innovations can thrive without fragmenting liquidity.
Regarding service provider alignment, I agree fixed costs were a good bootstrap model. But to scale, a revenue-share or KPI-driven model would align SPs more closely with Aave’s growth. This would not necessarily mean higher DAO spending, rather it turns SPs into performance-driven units: if Aave wins, SPs win.
Margins are another crucial point. Lending inherently drives lower margins, though it delivers high utility via collateralization. GHO has significantly improved margins (up to 10x), but it alone will not be enough. For Aave DAO to grow sustainably, we need to develop new business lines beyond lending. A DEX, perpetuals, and even options markets should be considered to bring margins above the lending baseline while mitigating counterparty risks.
Overall, there are many layers to this discussion, from L2 deployment strategy, to service provider incentives, to future business lines. I would like to thank ACI again for starting this discussion and I am looking forward to seeing the proposed new framework.