[ARFC] Aave Will Win Framework

[AaveLabs]

1. Summary

Aave began with the thesis that decentralized lending could play a major role in traditional finance. Eight years later, that thesis has been validated. Aave is the largest protocol in decentralized finance, commanding a 60% market share in lending. The opportunity ahead, however, is bigger than anything behind us.

Detailed below is a strategic framework proposal for Aave’s next chapter. It is the result of extensive community discussion during the Temp Check phase and incorporates significant feedback from DAO stakeholders.

It proposes to direct revenue from Aave-branded products to the DAO treasury and to establish a one-year budget for continued development under an accountability framework. It also includes a commitment to protect the Aave brand and its intellectual property. Based on community feedback, the ratification of Aave V4 and the detailed structure of a brand-governing structure have been unbundled from this proposal and will each be addressed in separate, dedicated governance proposals.

This proposal asks the DAO to approve the following operational framework:

1. Direct 100% of revenue from all Aave Labs’ Aave-branded products to the Aave DAO treasury.

2. Commit to a solution for protecting the Aave brand and its intellectual property.

3. Create a one-year framework for the DAO to fund strategic growth and development with accountability.

2. Aave Labs Commitment

We are becoming a token-centric company and formalizing our alignment with the Aave DAO. Going forward, we will continue to generate revenue, but that revenue will flow to the DAO.

Under this framework, Aave Labs works exclusively on Aave-related products, protocol development, and ecosystem growth. We will not build non-Aave related products, pursue outside revenue, or retain product revenue for our own operations. The DAO funds our work, and the DAO receives the revenue that work produces. Every dollar we receive is invested in building, growing, and scaling the Aave Protocol.

Any unspent funds at the end of the 12-month period will be returned to the DAO treasury or rolled into any DAO-approved subsequent budget.

3. Motivation

The LEND token sale in 2017 raised $16M to build a decentralized lending protocol. That initial foundation grew into Aave, a multi-billion-dollar ecosystem that has since created billions in value.

Along the way, Aave Labs (the core development team behind the Aave protocol) has requested DAO funds only for direct protocol development and marketing activities. Everything else has been self-funded. This includes the product layer, which encompasses aave.com, the Aave mobile app, Aave Pro, Aave Kit, and Aave Horizon. It also includes legal and regulatory work, such as the response to a multi-year US Securities & Exchange Commission investigation, brand protection, trademark management, and compliance. Business development and growth has been self-funded as well.

We are now entering one of the most important periods that will determine Aave’s success going forward. Fintechs are entering DeFi, institutions are coming onchain, and regulatory clarity is emerging in certain markets that allows us to go directly to consumers. The protocols that win the next decade will be those that move fast, build great tools and products, and capture new markets before competitors. With the right focus, and by investing in important growth areas, Aave is positioned to do exactly that.

Other approaches to this framework exist, but each involves different trade-offs. Aave Labs could operate independently and retain product revenue to fund itself. However, this would require a clear separation between protocol revenues and those generated by the Aave-branded products built on top of the protocol. Alternatively, the DAO could directly build and operate Aave-branded products through governance, but the execution would likely be slower, and governance overhead is inherently difficult to scale at the pace required.

This proposed framework achieves a token-centric alignment and a vision to help Aave win in the coming decade. It directs product revenue to the DAO, includes a commitment to protecting the brand and intellectual property on behalf of the DAO, and provides a clear development roadmap with the resources to execute it.

4. Specification

Aave Product Revenue to the DAO

The first ever Aave governance proposal, AIP-1, established that the Aave Protocol be governed by AAVE token holders, resulting in the DAO rightfully receiving 100% of protocol fees.

And since Aave Protocol’s launch, Aave Labs has operated the primary interface, aave.com, which became a key access point for most of the protocol usage across retail users, power users, institutions and integrators. This interface has supported millions of users without a single security incident, demonstrating both reliability and sustained execution. In parallel, the DAO has matured significantly since AIP-1. With that foundation in place, we believe the time is right to evolve toward a more aligned, token-centric model that reflects the protocol’s growth and long-term trajectory.

Under this proposal, 100% of revenue from all Aave-branded products developed by Aave Labs will be directed to the Aave DAO treasury. This includes revenue from:

• aave.com, the existing interface, and all associated fees

• Aave App, the consumer mobile application

• Aave Card, a card tied to Aave App with all fees flowing to the DAO

• Aave Pro, the primary interface for Aave V4

• Aave Kit, enterprise solutions for fintechs and institutions building on Aave

• Aave Horizon, Aave’s RWA market and institutional services

• Any future Aave-branded products that may be developed

If approved, this proposal would direct all revenue from the products listed above. That includes revenue from the aave.com swap integration, currently generating approximately $12-24 million annually, to the DAO treasury. As a result, the DAO’s product revenue stream would become immediately material from day one.

We heard the community’s feedback on revenue definitions, and we appreciate the request for greater clarity. The intent of directing product revenue to the DAO is value-accretive. The purpose of this framework is to grow the DAO’s treasury rather than create a mechanism for Aave Labs to retain value alongside it.

“Revenue” is defined as gross product revenue earned by Aave Labs, minus any direct revenue sharing paid by Aave Labs to external partners including revenue rebates, revenue subsidies, revenue sharing arrangements and any additional direct user incentives. Under this definition, expenses only in relation to revenue-sharing arrangements and user incentives are explicitly included. No other costs, including development, infrastructure, or operating expenses, may be deducted from product revenue.

For increased community assurance, we commit to per-product transparency. All product revenue and deductions will be reported quarterly and verified by an independent third-party such as an auditor. This way, the DAO can have direct oversight of funding decisions and outcomes, and continue to vote accordingly.

With proper execution, the product layer can be an additional source of revenue for the DAO treasury. Combined with protocol fees, the DAO can fund its own growth, security, and development from a diversified revenue stream.

Aave Labs commits to work on only Aave-related products and protocols and nothing else.

Aave V4 and V3 Maintenance

Based on community feedback, the ratification of Aave V4 has been unbundled from this proposal. A separate, dedicated ARFC for the activation of Aave V4 has been passed by the DAO. And an AIP is now live for that activation. This allows the community to evaluate the V4 activation on its own merits, while this proposal focuses on the funding and operational framework. Aave V3 will continue to operate as long as it is needed.

Expanding Revenue Through Aave V4

The product layer is one part of the path to increasing the DAO’s annual revenue. The protocol layer, powered by Aave V4, is the other. Aave V3 already generates over $100 million in annualized revenue for the DAO, making it one of the highest earning DAOs in DeFi. Aave V4 expands on V3 with new monetization features that allow the protocol, and DAO, to capture more value from the risk it underwrites.

V4’s architecture also unlocks revenue streams that are not easily possible in previous Aave versions. Each Spoke can extend Aave into a new market or use case, with its own risk parameters and revenue model. As with V3, 100% of Aave V4’s protocol revenue will also go to the DAO.

We’ve taken a look at various products and protocols across the crypto, fintech, and financial services industries to show estimations that highlight the size of the opportunities available:

* These opportunity estimates are based on other protocols or products in each category (e.g. Pendle, Fluid), and the size of the opportunity (e.g. OTC lending volume), etc. They each represent a net new revenue opportunity on top of what Aave already generates today, and they are only possible to pursue in a scalable way once V4 is live. Reaching these estimates would also depend on market conditions, scale of adoption, and execution.

Aave V4 also introduces a new reinvestment module, which is an optional net new revenue opportunity for the DAO to consider. Currently, Aave pools maintain a significant idle float that currently earns nothing. This reinvestment feature allows the protocol to sweep this capital into short-term, low-risk yield opportunities pre-vetted and approved by the DAO, similar to a collateral listing.

When Aave rates fall below SOFR-rates, it signals underutilized liquidity that could be productively deployed. Based on historical stablecoin float levels and a risk-free proxy SOFR-rate, the additional interest that would have been earned is substantial:

* These figures are illustrative good faith estimates based on historical performance and idle liquidity, and are included to inform governance discussions around prioritization and resource allocation. They do not constitute projections, commitments, or expectations, and actual outcomes may vary materially depending on governance choices, execution, adoption, and market conditions.

This interest can be allocated between users and the DAO, or otherwise distributed at the DAO’s discretion. The analysis does not account for other strategies such as ETH staking or reinvesting into higher-yield opportunities, which may also be pursued if the DAO elects to do so.

Taken together, these opportunities illustrate the range of operational scale the DAO may need to support across both the protocol and product layers if adoption and market conditions warrant it. Viewed as an aggregate opportunity set, they suggest that the long-term revenue ceiling for the Aave ecosystem is materially higher than today.

The Aave Brand and Intellectual Property

As outlined above, we are moving toward a token-centric model and strongly believe that the Aave IP should be held in a community-protected vehicle. This includes, repositories, domains and any other operational assets necessary to ensure continuity in the event of service provider changes. As requested by the DAO community, the detailed structure for governing the Aave brand and its associated intellectual property will be presented in a separate, dedicated ARFC.

Establishing this community-protected vehicle will require substantial research, legal structuring, and consultation. The evolving regulatory environment can also be a factor in affecting this process and informing the range of viable options.

The Temp Check for this proposal will be live within 180 days if the Aave Will Win Framework passes. This gives ample time to properly research, scope, and provide precise details on how this could take place. However, the community-protected vehicle itself would not be created until the DAO decides on all relevant details.

Technical Roadmap and Expanded Responsibilities

This section covers what Aave Labs plans to build and maintain over the next year as part of the funding request in this proposal. It also explains how we will handle the responsibilities previously managed by BGD Labs and ACI following their departures.

Our work currently falls into four areas including the core protocol, GHO, user-facing applications (e.g. Aave Pro, Aave App), and developer tooling (e.g. Aave Kit).

Core Protocol

Our primary protocol work covers both Aave V3 and Aave V4. Development continues on the V4 core architecture and a full set of Spoke implementations. Development priority and sequencing will be determined by market demand, technical readiness, and strategic fit. Some Spokes listed here may be deprioritized or replaced by new opportunities as the market evolves. Our current focus includes the Umbrella Spoke, Flash Loans Spoke, Permissioned Spoke, Debt Trading Spoke, Segregated Collateral Spoke, LP Collateral Spoke, and Cross-Chain Spoke. Some Spokes and extensions, such as Reinvestment Strategies, may be developed by other service providers.

Aave V3 and V2 will continue to receive maintenance, security monitoring, and contract upkeep. We have the engineering bandwidth to absorb these responsibilities from BGD Labs. Parameter optimizations, risk management updates, security patches, and technical reviews of governance proposals will proceed as normal in collaboration with the DAO’s other service providers. New chain deployments and asset listing support will also continue as needed.

Aave App

The Aave App for iOS and Android is being built from the ground up as a consumer-facing mobile application. Planned work includes a simplified yield-bearing savings product, cross-chain yield strategy tools, fiat on- and off-ramp connectivity, recurring deposits, smart accounts with anti-phishing protections, and account recovery. The Aave App represents a major, multi-year commitment to bring Aave to a new generation of retail users.

Aave App puts Aave in front of a whole new consumer market with the potential to onboard millions of users. This puts Aave next to many of the largest fintech names in the world and allows it to expand beyond a DeFi-native brand.

While Aave App will begin as a simple savings application, it is designed to evolve into a more comprehensive product suite, incorporating features such as the Aave Card, unlocking yet more revenue opportunities.

GHO Stablecoin

Aave Labs will supervise, or directly implement, a direct minting integration for Aave V4 and on- and off-ramp infrastructure through a specific GHO Stability Module. Other activities like new collateral facilitators and multi-chain sGHO implementation will be supervised or contributed to without disrupting the work of other active service providers, that will continue operating as they where before and eventually expand their scope over time. These features expand GHO’s utility and make it easier for users and integrators to work with the stablecoin. While Aave Labs will supervise the core GHO maintenance when needed, the product’s scope is wide enough to support and maintain continued contributions from multiple service providers.

Aave Kit

Aave Kit is our dedicated, enterprise-grade B2B product suite for fintechs and institutions building on Aave. This is a significant opportunity. As more traditional financial companies look to integrate DeFi into their products, Aave needs a purpose-built set of tools, APIs, SDKs, and documentation to serve them. Aave Kit addresses this by providing enterprise-grade developer tooling, integration support, and a clear onboarding path for institutional partners. We are also exploring agentic interfaces (MCP for AI agents) as part of our R&D efforts in this area.

Aave Pro

Aave Pro is the primary user-facing interface for the Aave ecosystem, significantly enhancing and expanding the capabilities available to users. Its vision includes advanced functionality such as a transaction builder for complex position management, seamless migration tooling from V3 to V4, one-click leverage and deleverage strategies, direct fiat on-ramping from bank accounts, and expanded swap revenue through automated strategies. Many of these features will be directly revenue-generating for the DAO. The existing aave.com interface will continue to be maintained as a reliable access point and revenue source for the DAO, while Aave Pro represents its natural evolution.

Expanded Responsibilities

BGD Labs and ACI together have historically handled a range of distinct protocol functions. Each has been reviewed, and we have outlined which responsibilities can be absorbed by Aave Labs within the scope and funding framework of this proposal.

On the protocol side, this includes V2 and V3 contract maintenance, security coordination, chain upgrade analysis, asset listing and network technical reviews, support for V2 off-boarding, and enabling a user-driven migration path from V3 to V4. Treasury and collector contract management will transition to other service providers.

On the governance and infrastructure side, Aave Labs will assume responsibility for governance proposal tooling, maintenance of the Aave DAO GitHub repository, Guardian coordination, the Address Book, the Permission Book, CAPO pricing management, ENS space management, DNS and hosting for the governance interface, bridge adapter maintenance, Proof-of-Reserve automation, technical reviews of governance proposals, and securing the governance forum.

From ACI, Aave Labs will absorb, and in some cases further improve alongside the DAO, the governance proposal lifecycle (Skyward), Dolce Vita and incentive program infrastructure.

Some specialized functions will be transitioning to service providers other than Aave Labs. These include Risk Agents, the Aave Seatbelt safety mechanism, Aave Robot infrastructure, and the Generalized Risk Stewards (AGRS). This allocation ensures that responsibilities are best aligned with each team’s core competencies.

Roadmap Summary

The table below provides a high-level view of our technical priorities.

Focus Area	Initiatives	Workstream
Protocol Core	Aave V4 launch and continuous development, security, and maintenance	Development, Maintenance, Security
Protocol Core	Aave V4 Spoke development	Development
Protocol Core	V2/V3 maintenance and security	Maintenance, Security
Protocol Core	New chain deployments and asset listings	Maintenance
Protocol Core	Protocol improvements and R&D	R&D
Aave Horizon	Continuous expansion of RWA collateral	Development, Maintenance
Aave Horizon	Port Aave Horizon over to Aave V4	Development
GHO	GHO/sGHO development	Development, Maintenance, Security
GHO	V4 GHO integrations	Development
GHO	On/off-ramp solutions (GSM)	Development
GHO	LP collateral facilitator	Development
Aave App	Product development (iOS and Android)	Development
Aave App	Savings product and yield strategy integrations	Development
Aave App	Fiat on/off-ramp and recurring deposits	Development
Aave Pro	Product development	Development
Aave Pro	Transaction builder, leverage and deleverage feature, advanced strategies, fiat on-ramping, etc. for revenue generation	Development
Aave Pro	Incentive management and integrations	Development
Aave Kit	API, SDK, documentation	Development
Aave Kit	Agentic Aave R&D (MCP for AI agents)	R&D
Governance	Governance tooling and infrastructure	Maintenance, Security
Absorbed from BGD	Several protocol maintenance, security, and infrastructure functions for Aave V3/V4	Maintenance, Security
Absorbed from ACI	Governance operations and BD functions for Aave V3/V4	Operations

While not exhaustive and subject to expansion over time, this list reflects the minimum scope included in the funding request under this proposal.

DAO Growth Requires Resources at Scale

The operational framework outlined above requires execution at a scale commensurate with the opportunity. For Aave to scale and play a role in the real financial system, it must invest in growth with the same discipline and ambition as fintechs, banks, and other financial institutions. Without a clear commitment to this objective, Aave’s long-term upside will remain constrained. If all product revenue generated by Aave Labs flows to the DAO, the DAO must also be prepared to fund the continued development, maintenance and expansion of these products.

This is especially relevant as Aave Labs assumes the responsibilities of two departing service providers. The scope of work encompassed by this proposal is materially broader than any prior Aave Labs engagement and exceeds that of any individual service provider to date. It spans protocol development, product engineering, business development, legal and compliance, go-to-market execution, and nearly the full set of governance and infrastructure functions previously handled by BGD Labs and ACI. Despite this significantly expanded workload, we are confident we can deliver within the budget proposed during the Temp Check.

Aave Labs Funding Request

The DAO is now facing a structural decision regarding Aave Labs’ operating model going forward.

Currently, Aave Labs self-funds a substantial portion of its operations.

This reflects the original direction set by AIP-1: revenue from Aave-branded products, such as aave.com and other product surfaces, has been used to fund Aave Labs’ product development, marketing, legal, and operations costs, while the DAO has funded core protocol development and version upgrades.

Under the proposed operational framework, all fees generated by Aave-branded products would flow directly to the DAO treasury rather than being retained by Aave Labs to support its operations and product development. As a result, responsibility for funding Aave Labs’ activities would shift correspondingly to the DAO.

In parallel, Aave Labs would absorb the majority of responsibilities previously handled by BGD Labs and ACI. Together, these two service providers were funded at approximately $7.4M per year in stablecoins plus 9,450 AAVE per year. This is a combined value of roughly $9M per year at current token prices.

Aave Labs requests $25 million in stablecoins, 75,000 AAVE, in addition to growth and development grants structured in line with community feedback, as detailed below:

Primary Grant:

• Aave Labs proposes a total primary grant of $25 million, structured across three components:

• $5 million paid upfront upon approval of the proposal

• Two concurrent streams both starting at month one:

  • Stream A: $5M over 6 months (~$833K/month, ends at month 6)

  • Stream B: $15M over 12 months (~$1.25M/month, ends at month 12)

This structuring is intentionally front-loaded to support the most capital-intensive phase of execution, particularly pre-launch product development and initial go-to-market efforts, where timely investment is critical to success.

Any unspent portion of the primary grant at the end of the 12-month period will be returned to the DAO treasury or rolled into a subsequent DAO-approved budget, ensuring continued accountability and capital efficiency.

In addition, 75,000 AAVE will be allocated upon approval of the proposal, vesting linearly over a four-year period. This extends the vesting schedule outlined in the original Temp Check, in response to community feedback for stronger long-term alignment between Aave Labs and the DAO.

This grant is intended to fund Aave Labs’ operations over the 12-month period and support the expanded scope of work outlined above. The AAVE token allocation further enables Aave Labs to offer competitive long-term aligned compensation as the organization scales.

Recruiting experienced engineers and operators in DeFi requires token-based incentives, which are standard across the industry. The AAVE token grant serves two purposes: keeping Aave Labs competitive in a brutal talent market, and ensuring our team is directly aligned with the AAVE token.

On the talent front, we are 8 years post-TGE, competing head-to-head for engineers and operators against companies that are pre-TGE or have raised hundreds of millions of dollars, all of whom can offer token or equity compensation with asymmetric upside. Token grants are therefore a critical mechanism for Aave Labs to remain competitive. Without them, both retention and recruiting become increasingly difficult.

Staff compensated in AAVE have a direct financial stake in the long-term success of the protocol, creating a level of alignment that is difficult to replicate through cash compensation alone. As Aave Labs takes on a broader operational mandate, we believe this alignment is essential.

These tokens will not be used by Aave Labs to vote on any governance proposals. Instead, they are allocated exclusively for employee compensation and will vest according to individual vesting schedules, reinforcing long-term alignment between the team and the protocol.

Growth and Development Grants:

In addition to the primary grant, Aave Labs requests a set of growth and development grants tied to specific product launches and milestones. These grants are distinct from the $25 million operating budget and are designed to fund the continued development, scaling, and long-term growth of the associated products and services.

Based on community feedback, the growth and development grants have been restructured to better reflect the relative scale of commitment required by each product:

• $7,500,000 allocated for Aave App, to support product development, marketing, and ongoing product operations. The Aave App is a major, multi-year commitment to build an entirely new consumer product from the ground up. This grant will be distributed in three tranches based on the following milestones:

  • Milestone 1: $5M upon public launch of the Aave App.

    • For go-to-market costs, insurance premiums, operating costs, ongoing product development, and consumer marketing.

  • Milestone 2: $2.5M upon reaching 50,000 verified user sign-ups within the Aave App.

    • For ongoing operating costs, user acquisition, onboarding costs, and consumer marketing.

• $2,500,000 for Aave Pro, structured as a milestone-based grant payable upon the launch of advanced, revenue-generating features. This reflects a more balanced approach based on community feedback, given that the existing Aave interface already generates significant revenue for the DAO in its current form.

  • Milestone 1: $1.5M upon delivery of the transaction builder, leverage and deleverage tool, and rewards dashboard.

  • Milestone 2: $1M upon delivery of new vaults integration (with custom yield strategies for users) and fiat on-ramping.

• $5,000,000 for Aave Card launch, with funds used for card program creation and maintenance, marketing, and ongoing product development streamed over 6 months.

• $2,500,000 for Aave Kit launch, with funds used for B2B go-to-market, marketing, product development and maintenance streamed over 6 months.

Note: For clarity, all funds will be spent on Aave-related efforts.

Growth and development grants are released upon delivery of the associated product and streamed over a nine month period, with governance confirming milestone completion prior to disbursement. This streaming structure, consistent with the primary grant, enables the DAO to maintain ongoing oversight while evaluating effectiveness over time.

As well-capitalized companies increasingly enter DeFi and invest aggressively in both product and distribution, Aave must operate at a comparable scale to remain competitive. This level of commitment enables long-term planning, accelerated hiring, and sustained investment in product and go-to-market without the constraints of annual budget cycles. These growth and development grants are designed to fund the cost of bringing each product to market, from engineering through go-to-market, covering all associated development and commercialization costs.

The funding requested represents a significant expansion in scope relative to historical funding. To date, Aave Labs has largely self-funded the cost of building and scaling the product layer, seeking DAO support mainly for core protocol development and focused marketing. This proposal secures the level of investment required for Aave to remain competitive and continue building over the next decade. Scaling Aave to compete with leading TradFi institutions requires stable, predictable funding, enabling contributors to plan effectively, attract and retain talent, and execute at the standard of a global financial platform.

Altogether, these funds cover the following costs:

• Continued protocol development (V4 improvements, Spokes, core infrastructure, research and development)

• Continued protocol maintenance and security coordination for Aave V3

• Product engineering across Aave Pro, Aave App, Aave Kit, and other products

• Product go-to-market, user acquisition, marketing (e.g. social media/content) and growth

• Business development, including partnering with the largest institutional and fintech names to integrate with Aave

• Aave Horizon asset onboarding and driving TVL/borrow growth

• Ongoing resource provision for institutional integrators, including technical, InfoSec and operational support

• Application security, including an extensive monitoring program and enterprise fees to social media platforms to protect the Aave brand

• Events, which Aave Labs historically has organized with DAO funding (e.g. rAAVE, DeFi Day, and institutional events)

• Absorption of ~40 functions from BGD Labs and ACI, including governance tooling, infrastructure maintenance, and security coordination

Note: Security audits are funded separately by the DAO and, where managed by Aave Labs, will be agreed with the DAO.

Aave Labs currently employs approximately 90 people. Roughly 60% are in technical teams (across engineering, product & design and security), with the remainder in business development, marketing, operations, legal and compliance. The approximate budget allocation by category is as follows:

Category	Approximate Allocation
Engineering	60%
Product	20%
Business Development	10%
Marketing and Events	5%
Operations, including Legal and Compliance	5%

With this funding, Aave Labs would have the runway required to execute effectively on the initiatives outlined above. It also reflects a deliberate choice by the DAO to fund the level of execution necessary to support protocol operations at an increased scale, should governance determine that such expansion is warranted.

To maximize effectiveness, Aave Labs would retain autonomy over individual product strategy and day-to-day operations. Building competitive products requires the ability to move quickly, make decisions without excessive coordination overhead, and iterate in response to real-time market feedback. We recommend a similar model for other Service Providers who might choose to operate under this framework, enabling each to execute efficiently with clearly defined mandates.

Accountability Framework

This funding is subject to a strict accountability framework built on community feedback.

Aave Labs will publish quarterly accountability reports covering: (1) funds received and spent by category, (2) KPI performance versus targets, (3) product delivery status, and (4) headcount changes. The first report will be published within 90 days of funding approval.

Product-level KPIs will be tied directly to each funded initiative:

Product	Key Performance Indicators
Aave App	User Sign-Ups, Assets Under Management (AUM), Balance Retention Rate
Aave Protocol	Net deposits, loans outstanding and originated, fees generated for DAO, active addresses
Aave Pro	Trading volume through new features, revenue generated for the DAO, user adoption of advanced tools, AUM
Aave Kit	Number of institutional partners integrated, net deposits and borrow volume onboarded through Aave Kit
Aave Card	Number of active cardholders, transaction volume, net revenue generated for the DAO
Protocol Core	V4 development milestones, V3 uptime and incident response, new chain deployments completed

All revenue and deduction figures will be independently verified and published to the governance forum.

The DAO retains ultimate oversight through its control of the treasury and Aave Labs’ funding stream. If Aave Labs does not meet its commitments or perform effectively, the DAO can choose not to renew this budget.

5. Next Steps

Aave remains early in its journey. What exists today is a foundational base layer, while the real scale of adoption lies ahead as global finance increasingly moves onchain. DeFi, in its current form, represents only a small fraction of the broader financial system. Over the coming decades, trillions of dollars in assets will migrate onto open rails. In that environment, Aave is well-positioned to become core infrastructure for global finance.

Since 2017, the focus has been on disciplined execution at the frontier, and that approach continues to guide the protocol today. The next phase of growth, driven by innovation and accelerating institutional adoption, presents a significantly larger opportunity. With sustained commitment and effective execution, Aave can scale to support significantly greater demand and further solidify its role as core liquidity infrastructure for the onchain economy.

This proposal seeks to establish a framework for Aave’s next decade. Upon approval, it would reaffirm Aave Labs’ alignment with the DAO by directing all Aave-branded product revenue to the DAO treasury, while enabling the resources required to execute at the necessary scale. It also commits to safeguarding the Aave brand and intellectual property on behalf of the DAO. A separate V4 activation proposal, along with a proposal outlining the structure for a separate community-protected vehicle will follow.

If community consensus is reached, this proposal will be raised to Snapshot.

If the Snapshot outcome is in favor, the framework will be implemented via one or more onchain AIPs to establish the funding streams and formalize the commitments outlined in this proposal.

Disclaimer

Historically, Aave Labs has self-funded its operations. Under this proposal, Aave Labs would receive funding from the DAO in exchange for directing revenue generated from Aave-branded products to the DAO treasury, if approved. This proposal was authored solely by Aave Labs, with no third-party contributors.

Copyright

Copyright and related rights waived under Creative Commons Zero (CC0).

[JosueMpia]

Before we head to the quarterly livestream at 1:30PM.

So the community feedbacks you got from hundred of replies from temp check mostly resulted in reshuffling money between products and extending the AAVE vest, not actually reducing the total ask.

Category	Temp Check (Feb 12)	ARFC (Mar 27)	Change
Primary grant	$25.0M	$25.0M	—
Aave App	$5.0M	$7.5M	+$2.5M
Aave Pro	$5.0M	$2.5M	-$2.5M
Aave Card	$5.0M	$5.0M	—
Aave Kit	$2.5M	$2.5M	—
Stablecoin subtotal	$42.5M	$42.5M	—
AAVE tokens	75,000 (2-year vest)	75,000 (4-year vest)	Vesting extended
AAVE value @ ~$105	~$7.54M	~$7.54M	—
All-in total	~$50.04M	~$50.04M	—

Let’s me give you the benefit of the doubt:

1. First, removing V4 from this ARFC is a real improvement.
2. Second, BGD and ACI stepping away does justify part of the budget request.
3. Moving Aave trademark Including all IP to the foundation is addressed.
4. Phased capital based on growth grants is addressed based on reporting and KPI tracking.

I will vote YES on this ARFC, mainly because I loved and trusted @bgdlabs and @ACI more. And with BGD and ACI stepping away, it makes sense Aave Labs will take more work.

My small concern is that @AaveLabs may be overpromising here too much on a roadmap that includes multiple initiatives which will realistically take months to execute. Some of these efforts may be delayed by months and months, may never fully become meaningful products, or may fail completely. Because of that, the DAO should have stronger, explicit KPIs cut off mechanics so it can cleanly cut growth funding immediately if Aave Labs underdelivers.

That said, the proposal is materially improved and the growth plan can help determine if things are going well so I truly appreciate the effort behind this ARFC.

Great work everyone, and let’s move on.

[ApuMallku]

First off, I want to express my clear support for this ARFC. The Aave Will Win Framework brings a tremendous amount of structural and operational value to the protocol. Considering that Aave Labs is stepping up to absorb the massive workload and responsibilities left by the departures of BGD and ACI, the proposed budget is entirely reasonable. Consolidating these efforts under one clear, accountable roof is the right move for our long-term efficiency.

However, as a delegate representing token holders, I have to address the elephant in the room.

Despite this major, highly anticipated proposal going live, the AAVE token has taken a significant hit, breaking below the psychological $100 barrier. We can build the best lending infrastructure in the world, but the market is always right. For years, the AAVE token has struggled to build and maintain sustained momentum. A large part of that blame falls squarely on the persistent void regarding the token’s utility. At both a structural and communicational level, we have failed to translate the protocol’s undeniable success (TVL, revenue) into tangible token holder value, and the market is punishing us for it daily.

A few weeks ago, I published The AAVE Utility Renaissance Temp Check to try and inspire Labs and the community to tackle this exact issue. I feel I may have fallen short in that mission, as this current framework still largely leaves token holders on the sidelines. I outlined ideas like introducing wstkAAVE as collateral (with a mandatory liquidity bootstrapping phase) and Guaranteed GHO Rebates via an off-pool Merkle-based Claim contract.

I don’t know if these specific mechanisms are fully feasible within the upcoming V4 architecture, but they were meant to act as catalysts. They were designed to put token holders front and center again.

Nobody benefits from a suppressed token price. This is especially critical right now: since Labs is wisely putting the token at the center of its strategy to retain top talent by offering bonuses in AAVE, it is in absolutely everyone’s best interest—Labs included—to ensure the token appreciates through real, fundamental utility.

The framework is strong, but it feels incomplete without a definitive strategy for value accrual. I would love to see Labs explicitly consider incorporating a central idea, or a dedicated workstream within this mandate, focused purely on restoring AAVE token utility.

Let’s make sure the protocol wins, but let’s also make sure the token holders win alongside it.

[MconnectDAO]

Broadly supportive of the “Aave Will Win” direction of making Aave Labs fully token-centric and routing 100% of branded product revenue back to the DAO, with clear per‑product KPIs. Given the size and scope of the mandate, I’d just emphasize the need for very explicit definitions of “net revenue” (after partner/user incentives) plus independent verification of those numbers, and for the vendor‑concentration side to be mitigated via strong reporting and regular review/renewal checkpoints.

[DTBAEE]

AAVE Labs is a team that, when users lost $50 million on the AAVE platform, members of AAVE Labs blamed the users as idiots. This supposedly brilliant team is about to embark on a truly earth-shattering undertaking.

Let’s see what kind of “good” product a company that can’t even consider the basic needs of its users can produce.

The emperor is eager to show us “The Emperor’s New Clothes.”

[Millesimillia]

Dear DTBAEE, since you use a public forum: your statement is clearly biased and not grounded in facts. I see it as a sign of a sore loser when people in any decision-making system cannot restrain themselves after losing a vote or even actively continue to stir up ill will. That is antisocial and harms everyone involved. I ask you to reconsider your comment; no one is forcing you to continue participating in this forum or supporting Aave. Kind regards, Saemi

[BeliveInAave]

This Proposal is not definite enough and uses too imprecise language: Gemini gave me these improvements to the proposal, so the DAO has the ultimate rights to IP and revenue

1. The “No IP, No Stream” Escrow (Fixes the “Agree to Agree Later” Loophole)

Currently, Aave Labs gets the money on Day 1, but the DAO gets a “commitment” to figure out the IP later. This needs to be reversed.

• The Stipulation: The $25M base grant and the 75,000 AAVE tokens must not be sent directly to Aave Labs. They must be sent to an escrow smart contract. The stream will only activate after the legal transfer of aave.com, the trademarks, and the GitHub repositories to a DAO-controlled Foundation is finalized and verified by a multi-sig of independent delegates.

• Why it’s bomb-proof: It forces Aave Labs to act fast on the legal paperwork. If they stall the IP transfer, they stall their own paychecks.

2. The Anti-Self-Dealing Hard Cap (Fixes the “External Partners” Loophole)

The current phrasing allows Aave Labs to deduct an unlimited amount of revenue to pay “external partners” before giving the remainder to the DAO.

• The Stipulation: Amend the revenue definition to include a Hard Cap. Aave Labs may not deduct more than X% (e.g., 15%) of gross revenue for external partner sharing without a separate, explicit DAO vote. Furthermore, add an Anti-Self-Dealing Clause: Aave Labs must legally attest that they hold no equity or financial stake in any “external partner” receiving a revenue cut.

• Why it’s bomb-proof: It prevents Aave Labs from spinning up a side-company, labeling it an “external partner,” and routing 80% of the frontend fees to it.

3. The “Funded Development” Catch-All (Fixes the “Aave-Branded” Loophole)

The DAO is paying Aave Labs’ salaries for a year. Therefore, the DAO should own the output of that labor, regardless of what sticker Aave Labs slaps on it.

• The Stipulation: Erase the distinction between “Aave-branded” and “Aave-related.” The new clause must state: “Any product, interface, or protocol developed in whole or in part by Aave Labs using DAO funding during this 12-month period is subject to the 100% revenue transfer, regardless of the brand name or domain under which it is launched.”

• Why it’s bomb-proof: It closes the spin-off loophole. If Aave Labs uses DAO money to build a highly profitable “GhostCredit” app that doesn’t use the Aave name, the DAO still gets the revenue.

4. Protocol-Level Fee Routing (Fixes the Off-Chain Enforcement Loophole)

You cannot trust a centralized legal entity to manually wire crypto to a decentralized DAO every quarter.

• The Stipulation: Mandate that all on-chain products (Aave Pro, swap widgets, V4 integrations) must have fee-routing hardcoded at the smart contract level directly to the DAO’s Collector Contract. Aave Labs cannot act as a middleman wallet. For off-chain fiat revenue (like App Store fees or Aave Card swipes), the release of the Milestone Grants (the $17.5M) must be legally contingent on a signed Master Services Agreement (MSA) between Aave Labs and the DAO’s legal wrapper.

• Why it’s bomb-proof: “Code is law.” If the smart contracts automatically route the fees to the DAO treasury, Aave Labs physically cannot withhold the money, even if relations turn sour down the line.

The Bottom Line: The Aave DAO is effectively acting as a Venture Capital firm funding a $42.5M Series A round for Aave Labs. If a VC were making this deal, they would demand ironclad legal and technical covenants. The DAO must do the same.

[axieaur]

i strongly agree with all of these recommendations.

• ip first, money after
• no self dealing agreement
• all funded development is DAO owned
• all fees coded to flow directly to treasury

thank you for these recommendations. i believe they are extremely logical and important.

[Millesimillia]

I tend to disagree with a part of your bottom-line. The comparison with a critical, long-term supplier seems more appropriate to me than your VC reference. I agree, however, that we need clear governance for suppliers including RFP processes, performance metrics, and exit options to give all potential current & future suppliers the same rights/opportunities.

[Millesimillia]

As an additional point: treasury tokens belong to the DAO and should therefore not be used for voting. Otherwise, the argument that some people should not use their tokens for voting (e.g., Stani with his latest token purchases) is a non-starter. Aave belongs to its token holders and every token holder has his full voting rights.

[A_J]

I am aligned with the proposal and an optimist for the following reasons:

Revenue-to-DAO + 4-year vesting = real skin in the game.
Voting YES—with eyes on tightening safeguards in the AIP stage.

1. Revenue Alignment

Acknowledgment: Directing 100% of product revenue to the DAO treasury is a powerful signal of commitment. It resolves prior ambiguity about value flow and positions Aave Labs as a true steward, not a vendor.

2. Consolidated Execution Post-BGD/ACI

Acknowledgment: Absorbing ~40 critical functions under one accountable entity addresses a real operational gap. The expanded scope shows Aave Labs is stepping up to ensure continuity in security, governance tooling, and infrastructure.

Food for Thought:

As Aave Labs becomes the “central nervous system” , diversity should be encouraged.
Consider creating a program for new service providers in a separate proposal or adding a governance principle that critical functions (e.g., risk parameter updates, audit coordination) should, over time, be open to competitive bidding or multi-provider rotation. This prevents single-point dependency and encourages innovation among service providers—keeping the ecosystem antifragile.

**3. ** Milestone-Based Growth Grants

Acknowledgment: Tying $17.5M in growth funding to product-specific KPIs (user sign-ups, AUM, active addresses) is a mature approach to performance-based funding. It shifts the conversation from “trust us” to “show us.”

Food for Thought:

KPIs should not just include growth metrics, but also decentralization or resilience indicators.
For example: % of new users connecting via non-custodial wallets, diversity of active addresses, or % of liquidity sourced from non-whale entities. This ensures growth doesn’t come at the cost of centralization—and aligns with Aave’s long-term ethos of open, permissionless finance.

4. Extended Token Vesting (4 Years)

Acknowledgment: Moving employee AAVE grants from 2 to 4 years of linear vesting meaningfully strengthens long-term alignment. It signals that Aave Labs is incentivized for protocol sustainability, not short-term delivery. Also seeking best talent in this space is challenging and tokens allow incentive.

Food for Thought:

Portion of vesting dynamically tied to protocol health metrics.
Imagine 20% of the employee grant vesting only if annual security audits pass with zero critical findings, or if GHO maintains its peg >95% of the time. This creates a direct feedback loop between team incentives and protocol resilience—making “winning” a shared, measurable outcome.

5. Clear Product Roadmap (V4, App, Pro, Kit)

Acknowledgment: The technical vision is compelling—modular “Spoke” architecture, consumer onboarding via mobile, institutional tooling. It shows Aave Labs is thinking across the full user spectrum.

Closing Thoughts

This framework represents a pivotal step toward mature DAO-operated development. The strengths—revenue alignment, consolidated execution, performance-based funding—are exactly what Aave needs to scale responsibly.

With AAVE’s framework’s DNA, AAVE Labs ad community can co-create a resilient, community-owned growth engine.

“Aave Will Win”

[MconnectDAO]

As an Aave governance researcher and delegate, I see the “Aave Will Win” framework as directionally positive, but I believe we still need stronger guarantees on decentralisation, competition and accountability before this moves to AIP.

First, the current scope and budget effectively make Aave Labs the dominant, multi‑year service provider for a wide surface area of Aave’s stack. I am not against this in principle – continuity matters – but I would like to see a clearer commitment to an open, competitive framework: mandatory RFPs for new workstreams, transparent criteria for onboarding additional providers, and an explicit expectation that key scopes (risk, growth, infra, apps) remain contestable over time, not de‑facto exclusive.

Second, KPIs and milestones should be expanded beyond product and growth metrics. For a token‑centric model, decentralisation and resilience are also core “performance” dimensions. I would prefer to see: (a) concrete risk and security milestones, (b) indicators around GHO health and protocol robustness, and (c) diversity‑of‑providers goals, all tied to vesting, renewals, or future budget approvals, not just one‑off reporting.

Finally, given the size of the commitment, I would be more comfortable if disbursements are explicitly milestone‑based with clear clawback or non‑renewal options in case of persistent underperformance against agreed KPIs. This keeps the framework aligned with “Aave will win” as a DAO‑first, not provider‑first, thesis.

With these adjustments (stronger RFP/competition guarantees, broader KPIs, and milestone‑based disbursement), I am inclined to support the direction of this ARFC and would likely support an aligned AIP. Without them, my position would lean towards abstain/soft‑no until safeguards are strengthened.

[AaveLabs]

The ARFC for the Aave Will Win Framework has been raised to Snapshot. Voting will begin in 24 hours. You may participate here.

[EzR3aL]

Hello @AaveLabs I have been testing Aave v4 and realized that swap fees still go to here 0xC542C2F197c4939154017c802B0583C596438380.
Is this gonna change after the this proposal passes?
I kind of thought that with the launch of v4 it would directly go to the DAOs treasury.

[axieaur]

was wondering about this as well. thanks for raising this question, ezr3al

[AaveLabs]

Hi @EzR3aL,

That address is a routing address on CoW Swap’s side related to UI swap fees, which flow separately from protocol-level V4 fees. The plan is for that routing to transition to the DAO as part of the broader Aave Will Win changes, but it operates through a different mechanism than V4 Treasury Spoke fee collection.

[DTBAEE]

This is the evidence you need: this AAVE employee named Emilio publicly insulted users, calling them idiots. Do you think a company like that can make good products?

No one is a sore loser; it’s just that seeing AAVE destroyed by Stani and AAVE Labs is painful. Of course, if you think it’s good, you’re welcome to continue buying.

Public discussion will not damage AAVE’s reputation; what damages AAVE’s reputation is the actions of Stani and AAVE Labs. Everyone has lost faith in them. The people can support a boat, but they can also capsize it!

[Millesimillia]

Thank you, DTBAEE. I appreciate your effort to being forward verifiable facts. To reference that someone is retarded is never a good idea, especially when coming from representatives of a major stakeholder like Aave Labs.

At the same time, I personally experienced wide swings in Marc’s opinions (i.e., from a podcast where he supported Aave Labs to hard criticism within less than a month) and I also personally experienced that his communication style was sometimes ‘special’ (i.e., not appearing in meetings where he was expected, then ghosting his counterparts). I also perceived him as being increasingly political, which is also not helpful given his position (e.g., the post by Marc that you reference; in Marc’s position it would have been better to take up such things directly with the involved people).

Now, I do not say that I am always right, nor do I know everything, but I speak from significant experience in conflict resolution.

Regarding Aave Labs direction and as posted in a separate chat: I personally worked extensively with JPM in the past (the topic was the issuance of complex derivative instruments). They would not work with a DAO that has an unclear governance. I guess they would, however, work with a DAO, represented by a solid foundation and clear governance procedures & regulation. That can only be implemented by temporarily exercising more direct control and by providing a clear path forward. So the direction of Aave Labs is not as silly as some might think.

Let us see, nobody knows the future. I am willing to bet on Aave including all pros & cons - and, yes, I am still accumulating Aave tokens given current price levels.

[PatrickB]

Can we confirm that revenue from swaps on Aave are now going to the dao rather than labs? After the successful launch of AWW.

[EzR3aL]

You can easily test it yourself. Do a small test swap and then you can check the address of it.