This report provides the Aave DAO with an overview of Aave Labs’ work since 2017. While it cannot capture every detail, it aims to provide an easy-to-follow account of how the protocol was built. As tokenholders consider the upcoming “Aave Will Win” proposal, this historical context is intended to support a well-informed decision about the future of the protocol and how Aave Labs has operated as its core development team.
Protocol Invention and Development
ETHLend
The project began with the EthLend ICO in November 2017, which raised $16.2 million to build a decentralized lending application on Ethereum. EthLend was founded by Stani and its peer-to-peer model proved difficult to scale at the time. During the 2018-2019 bear market, the team rebuilt the protocol around a pooled liquidity model, rebranding to Aave. This architectural shift set a new standard for DeFi lending.
Aave V1
Aave V1 launched in January 2020, introducing the liquidity pool architecture that solved the main problems of EthLend’s model. Lenders could deposit assets into a shared pool and earn interest, while borrowers could instantly draw liquidity from that pool. V1 also introduced for the first time a key innovation, Flash Loans, which are uncollateralized loans that must be borrowed and repaid within a single transaction. Flash Loans created new possibilities for arbitrage, collateral swapping, and liquidations, and became a building block for many other DeFi protocols.
Aave V2
Eleven months later after V1, in December 2020, Aave Labs delivered V2 with important new features and gas optimizations. Collateral swaps allowed users to change their collateral without repaying their loan. Batch flash loans and debt tokenization improved capital efficiency and composability. These two versions, developed and launched in a single year, established the technical foundation that allowed Aave to capture the market during the 2021 bull run ($31 billion deposits at peak).
Aave V3
V3 first deployed in March 2022 on 6 networks and reached Ethereum mainnet in January 2023. It was designed as a multi-chain protocol with significantly improved capital efficiency. One feature, Efficiency Mode (eMode), was proposed and designed by Aave Labs as part of the initial V3 architecture. eMode allows much higher borrowing power against correlated assets and is the direct technical enabler for the high-yield LRT and stablecoin strategies that generate a large portion of the protocol’s current revenue.
eMode was originally introduced as part of the V3 architecture, establishing the technical foundation for more capital-efficient strategies. In the v3.2 upgrade, BGD Labs expanded this framework through Liquid eMode, enabling a single asset to participate in multiple eMode categories simultaneously. Together, these architectural steps created the flexibility that underpins many of the protocol’s current revenue strategies. Those outcomes reflect cumulative contributions across protocol design, subsequent upgrades, risk analysis, asset onboarding, and DAO governance decisions.
Safety Module
The Safety Module was introduced in October 2020 as a core part of the Aave V2 release. It is a dedicated smart contract pool where AAVE tokenholders can stake their tokens to act as a backstop in case of a shortfall event. In exchange for providing this security, stakers earn a yield paid in AAVE tokens. The Safety Module was designed and built by Aave Labs to provide an onchain backstop mechanism, increasing the protocol’s resilience and protecting depositors.
GHO
Aave Labs proposed, designed and built GHO, the protocol’s native, decentralized stablecoin. The proposal was submitted by Aave Labs in July 2022, and GHO launched on Ethereum in July 2023 after security audits. Labs built the entire GHO system from the core smart contracts, the multi-chain architecture using Chainlink’s CCIP, the GHO Stability Module (GSM) that helps maintain the peg, and the concept of Facilitators that allows other protocols to mint GHO within safe limits. Interest paid by GHO borrowers goes directly to the Aave DAO treasury, creating a new revenue stream for the protocol. Since its launch, GHO has generated over $22 million in revenue for the Aave DAO. We expect GHO to be a critical component of future DAO revenue going forward.
Aave V4
V4 is the next major iteration of the protocol, representing a complete architectural overhaul. It was first proposed to the community in May 2024, with a projected release in mid-2025. Its new features include a unified liquidity layer through a Hub and Spoke architecture, dynamic risk premiums that adjust rates based on collateral quality, and a redesigned liquidation engine to prevent over-liquidation. Aave V4 was the result of two years of research, completed in Q2 2024, and development began shortly after. A public testnet is now live for review.
Additional Innovation
Aave Labs has also contributed and innovated in other areas. We detail some of them below, however this is not exhaustive for sake of brevity.
The Aave Frontend
Aave Labs develops and maintains the frontend at aave.com for the Aave Protocol, which is used by hundreds of thousands of people every month. This is a dedicated product requiring its own engineering, security team, and support efforts. Outside of the app frontend, this includes all of the website’s content, documentation for builders, etc. Recently, Labs integrated CoW Swap for better trade execution and UX with added monetization features. Under the “Aave Will Win” proposal, 100% of this revenue goes to the DAO treasury, including revenue from any new features we plan to build into Aave Pro.
Aave Arc and Horizon
To facilitate institutional adoption, Aave Labs launched Aave Arc in January 2022. Aave Arc is a permissioned version of the Aave protocol designed to be compliant with AML regulations. All participating institutions must undergo KYC verification through whitelisters like Fireblocks, which had approved 30 financial institutions at launch. While Arc itself wasn’t a home run, and was perhaps “too early” to find PMF, Aave Labs was able to parlay those learnings and connections into Aave Horizon.
Aave Horizon, launched in August 2025, is a real-world asset (RWA) tokenization initiative. It is a lending market that allows institutions to borrow stablecoins against their tokenized RWAs, bridging traditional finance and DeFi. At launch, Aave Horizon supported collateral from Circle, Superstate, and Centrifuge, and established a network that included institutions such as Ant Digital Technologies, Chainlink, Ethena, Ripple, Securitize, VanEck, and WisdomTree. The platform is currently built on Aave V3.3 and is designed to comply with regulatory requirements for permissioned RWAs. As of this writing it is the largest, and fastest-growing, RWA market in DeFi.
The Aave Brand
In May 2024, Aave Labs proposed and the DAO approved a new, unified visual identity for Aave. This was a complete redesign of the brand, from the logo to the color palette and typography, creating a professional and recognizable look that is now used across all Aave products and communications. The Aave brand has become one of the most widely recognized in our industry.
Aave App
The Aave App is a mobile application designed to provide a user-friendly savings account with a high yield, aiming to be a DeFi alternative to traditional savings accounts. It offers features like automated savings and balance protection, making DeFi accessible to a broader audience. In connection with this effort, Aave Labs acquired Stable Finance, a San Francisco-based fintech company, to accelerate the development of consumer-friendly products. The Aave App announcement was one of DeFi’s most successful announcements in 2025. Garnering near 10 million impressions across socials and the press. It also put Aave’s name front and center across many publications and entered Aave into the multi-trillion dollar fintech arena.
Work Outside the Governance Forum
To continue a point from earlier in this report, the governance forum records proposals and votes. It does not record the full scope of work required to build and maintain a protocol used by millions of people. Aave Labs carries a range of responsibilities that are important to the protocol’s continued operation and growth.
Protocol Security and Infrastructure
The Aave protocol has undergone dozens of audits from firms including ABDK, Certora, Consensys Diligence, OpenZeppelin, PeckShield, Sigma Prime, Trail of Bits, and Runtime Verification. Aave Labs also operates 24/7 security operations for its products and designed the original Safety Module (stkAAVE) to protect the protocol from shortfall events.
Aave Trademark Defense
Aave Labs has borne the cost of protecting the Aave brand and trademark globally. This includes monitoring for unauthorized use alongside actively pursuing the take down of numerous scams trying to take advantage of the Aave name and brand.
Marketing and Brand Growth
Aave Labs runs all primary marketing channels for the Aave protocol and its products. The team coordinates social launches for new deployments, protocol releases, product launches, and partner integrations. Labs has grown the official Aave X account to over 680,000 followers and generates tens of millions of impressions each year across social channels.
Beyond social media, Labs has built lasting relationships with journalists and media outlets, earning reliable press coverage for major announcements. Team members spread awareness of Aave across podcasts, conferences, panels, and networking events throughout the year. Labs also manages inbound partner marketing requests, coordinates co-marketing with partners on new integrations, and ensures that launches are visible and well-received.
These functions are critical to Aave’s growth at both the protocol level and the partner level. Every new chain deployment, every partnership, and every product launch depends on coordinated marketing to reach users, attract liquidity, and generate awareness. This work happens entirely outside the governance forum.
Events
Aave Labs organizes and hosts major events for the Aave community, funded by the DAO. For years, DeFi Day has attracted a variety of the industry’s biggest sponsors and has hosted panels for the biggest names in crypto (incl. Vitalik Buterin in 2025). Additionally, rAAVE has become a “must attend” event at any location where Aave is present, which is the result of years of execution, proper promotion, performer talent curation, and more. These events go a long way to build the Aave brand, build trust and respect, and create a lasting impression on the broader crypto community.
User Support and Operations
Aave Labs operates the primary support infrastructure for everyday users of the Aave protocol. Each year, the team handles tens of thousands of support tickets covering issues from transaction failures and wallet connectivity to questions about liquidation mechanics and interest rate calculations. This ongoing, resource-intensive work keeps users on the platform and builds trust in the Aave brand, yet it is largely invisible to governance participants.
Aave Labs’ Technical Contributions
To provide a more concrete measure of the work involved in building and maintaining these systems, Aave Labs analyzed its public software repositories. The data shows a long-term, high-volume development effort across more than 30 repositories, including at least 17 public and 14 private codebases for products like the Aave App and various backend services. The public data alone reveals a substantial body of work.
Across these public repositories, Aave Labs developed and maintains repositories containing over 570,000 lines of code represented by nearly 12,000 commits and more than 4,300 pull requests. The work is organized into distinct product categories, each with its own dedicated development effort. The core protocol and the main user interface represent the largest investments of development resources, followed by GHO and developer SDKs.
This development has been a continuous effort since the project’s inception and the timeline of this work shows a consistent pattern of innovation and expansion over many years.
Notably, these figures cover only the public repositories. At least 14 additional private repositories exist for the Aave App (iOS and Android), backend services, internal tooling, and other products that are not open-source for competitive and security reasons. So the actual volume of code written and maintained by Aave Labs is substantially larger than what is quickly visible on GitHub.
The frontend repository alone accounts for 3,521 releases, reflecting a pace deployment that averages more than two releases per day since its creation. It also shows the amount of work, speed, and commitment to operate a frontend as active and used as Aave’s. The V4 repository, despite being less than two years old, already contains 714 pull requests and roughly 69,000 lines of Solidity, a measure of what’s required to build the next generation of the protocol.
Aave Labs’ body of work, developed over nearly a decade, is the technical foundation upon which all protocol revenue and user activity is built.
Value Creation and Growth
Invention Precedes Growth
For a product to grow it needs to be innovative, competitive, and have many other similar traits. This is Aave Labs’ specialty. In DeFi, deep research and development creates the conditions for all subsequent growth and revenue potential for the DAO to pursue. A new protocol version or a major upgrade is a multi-year process of conceptualization, research, building, testing, and security audits.
By contrast, a governance proposal can move from discussion to onchain execution in a matter of weeks. Sheer volume of proposals made isn’t necessarily a gauge for the amount of work that led into each proposal. It also does not quantify the amount of work that is required after a proposal is made.
Thus, counting the number of governance proposals submitted is not a great metric for contribution. Labs’ work on V4, for example, involved years of research and development before a comprehensive proposal was put to the DAO.
Each of Labs’ 28 proposals represents the first, or final, step of a long and complex research and development cycle. To emphasize the point, a proposal to deploy a new protocol version is the product of thousands of hours of work. Adjusting a risk parameter takes a few days. Both are absolutely necessary, but both count as one governance action. Simply counting governance proposals posted treats them as equivalent amounts of work.
Revenue as a Group Effort
In 2021, Aave reached its first all-time high of $35 billion. After the market crashed in the wake of FTX, ETH’s price and DeFi TVL collapsed, with DeFi TVL falling from $200 billion to around $47 billion. By the time many of the DAO service providers joined in late 2022 and early 2023, the protocol had already generated approximately $388 million in cumulative gross revenue (i.e. revenue before costs) across V1, V2, and V3, with $5.5 billion in deposits and an AAVE market cap around $921 million.
Also by the end of 2022, four protocol versions had shipped and Flash Loans, the Safety Module, Aave Arc, and the GHO proposal were already in place. The technical infrastructure that produces revenue today, including eMode, was designed and deployed before any service provider other than Aave Labs existed. That said, some of today’s service providers were also employees at Aave Labs during the period above, so this is not to discredit those particular employee’s contributions.
From that foundation, the contributors who are still around today started to join the DAO. BGD Labs joined in March 2022, followed by Chaos Labs in August 2022, ACI in November 2022, TokenLogic in March 2023, and LlamaRisk in March 2024. Each brought a different skillset that has been valuable to the DAO.
Revenue growth is the result of this group effort, and the chain of contribution is traceable. For example, Aave Labs designed and built the core V3 architecture, including eMode, as part of the protocol’s January 2020 through March 2022 development cycle. When V3 launched on Ethereum mainnet on January 27, 2023, it was Llamaxyz (a former service provider) that proposed the initial eMode categories. These strategies became the foundation for the various looping strategies that dominate Aave’s revenue today. Later, when ACI and other service providers proposed additional strategies, and risk providers like Chaos Labs and LlamaRisk analyzed the safety of each new asset, the DAO approved their inclusion. As mentioned above, in 2024 BGD deployed Liquid eMode, which led to a more expansive set of these strategies. Every one of these touchpoints contributed to the resulting revenue.
We should also note that most partnerships require cross-functional work across multiple teams. Aave Labs frequently helps source deals, move them through negotiation, make cross-partner introductions, and close agreements. The MegaETH deployment is a most recent example.
Aave Labs stepped in when their team reached out due to their previous contact becoming unresponsive. We then worked with MegaETH, structured the agreement, and secured a minimum of $2 million per year for five years, totaling $10 million in guaranteed revenue to the DAO. Deals like this require technical due diligence, legal review, commercial negotiation, and coordination with the DAO’s risk providers. The work spans multiple teams and does not sit with any single contributor.
This type of mult-contributor effort is a huge part of the day-to-day work around Aave. To attribute the DAO’s revenue to a single service provider is to misunderstand (or misrepresent) how the Aave DAO functions. Revenue is a product of the protocol’s architecture and its evolution, the work of every service provider, the governance decisions of the DAO, and a variety of other factors.
Market Context and Organic Revenue Growth
We’d also like to highlight that Aave’s revenue trajectory correlates with the broader crypto market, and the data makes this plain. The chart below shows Aave’s quarterly gross protocol revenue (i.e. revenue before costs) alongside the average ETH price.
The correlations are easy to see and expected. When ETH rises, Aave revenue rises and in downturns, they fall together. This pattern held before any service provider other than Aave Labs existed, and it has held since. The protocol’s ability to generate revenue is, so far, tightly linked to the price of ETH.
This matters for two reasons. First, it provides additional context for any individual claims about revenue growth during a period when ETH itself appreciated. Second, it is the core problem that the “Aave Will Win” proposal seeks to address. Improvements through V4’s architecture and Aave Interfaces, plus new market distribution via Aave App, Aave Card, Aave Horizon, and Aave Kit, are the efforts required to drive growth for the DAO and reduce reliance on ETH-driven market cycles.
That said, Aave performed better than its closest competitors under the same conditions. From 2023 to 2025, Aave’s revenue grew by approximately 8x, while Compound’s grew by 1.73x. A rising market provided the opportunity, and Aave’s protocol architecture, combined with the work of Aave Labs alongside all DAO service providers, captured it. This truly was a group effort, as is required by the nature of how the DAO operates.
What Would Aave Look Like Without Aave Labs?
While we’ve tried to be exhaustive regarding Aave Labs’ contributions, we can give a brief overview of a timeline that doesn’t include Aave Labs. Without Aave Labs, there is no Aave protocol. The pooled liquidity model that replaced ETHLend’s peer-to-peer architecture was designed and built by Aave Labs. V1, V2, and V3 were designed, built, and shipped by Aave Labs. Flash Loans, the Safety Module, eMode, and the multi-chain deployment framework were designed and built by Aave Labs. GHO, from its core contracts to its CCIP bridge to its Stability Module, was designed and built by Aave Labs.
Without these things, there is no tech to grow or sell and no revenue to attribute. There are no eMode categories to configure or Liquid eMode, because eMode does not exist. There are no assets to onboard into V3, because V3 does not exist. There are no governance proposals to submit, because the protocol they govern does not exist. Aave revenue the protocol has generated since 2020 was earned on infrastructure that Aave Labs researched, conceived, designed, built, audited, and deployed.
The products that have helped Aave succeed and that will position Aave for the future would disappear too. There is no Aave Interface, no Aave App, no Aave Arc, which means no Aave Horizon. There is no recognizable brand, events, or marketing team growing the X account to 680,000 followers or coordinating press coverage. There is no legal team defending the Aave ecosystem from scams. There is no support team handling tens of thousands of tickets per year for hundreds of thousands of users.
While this section is not exhaustive, we won’t belabor the point.
Aave Will Win Proposal
As we continue through the process around the Aave Will Win proposal, we’d like to emphasize that Aave Labs has been contributing to Aave from day zero and intends to contribute indefinitely. Making Aave a core component of global finance is the goal and we have no desire to stop short of that.
The record of what Aave Labs has delivered alongside service providers and partners over the years is unparalleled in our industry, and the scope of what we’ve achieved and what we have planned for the future should inform voters’ decisions going forward.
The Aave Will Win proposal formalizes alignment between Aave Labs and the DAO in order to set Aave up to succeed over the next decade. You can find it here.
