I 100% agree with Marc and am glad to see Stani move in the right direction - but I am discouraged by Stani’s language here around “businesses being built on top of Aave taking their own fee does not exclude the protocol from making money”
We need 100% of all revenue going to Aave DAO with clear ownership rights and here’s why that is better for all parties from a financial standpoint:
With 100% of revenue going to the Aave token + ownership rights, it is worth much more from an enterprise value standpoint because with clear governance rights and certainty around cashflows the earnings multiple will expand and therefore be much more accretive vs. Aave labs taking revenue
Given the lack of standardization between revenue splits on various products and the uncertainty around IP rights, this corresponds to a level of uncertainty of the future cashflows of Aave DAO. As a result, both parties respective valuation multiples from an enterprise value standpoint will be much lower from an investor POV compared to simply accruing all the value to the DAO and giving Aave labs additional Aave tokens
Here’s a clear example
If there is $100M of total revenue for Aave Horizon let’s say at a 50/50 split which is the current set up - Aave Dao would get $50M and Aave Labs would get $50M. With Aave labs in control of branding etc, who is to say that will remain in the future? Who is to say that any new product developed around Aave has revenue routed to Labs instead of the DAO
Now investors cannot properly underwrite the future cashflows of Aave tokens and the entire protocol suffers
Keep in a mind a lower Aave market cap also discourages traditional asset holders from using Aave protocol
We also want to incentivize Aave Labs to continue doing great work expanding the product and doing business development. This should be done similar to how a CEO of any tech company is compensated : A salary determined by the board and equity (in this case AAVE tokens) - There should be zero revenue share between Aave Labs and Aave Dao as that ultimately takes away value from the Aave token as articulated above
This will ultimately make both the Aave Labs team members and Aave token holders much richer as the Aave token will accrue value much more significantly as it gains investor confidence and certainty
We need to model governance and valuation structures that have worked for hundreds of years in traditional finance while using the new crypto rails as a business model
Aave could be a darling of traditional finance talked about on CNBC, and other major media coverage bringing tons of investors and TVL - but the governance needs to be investor friendly
If stani wants to build businesses on top of Aave and not share 100% of revenue with Aave Dao then they should not have the Aave name, branding, etc, and should not get paid to do so out of Aave Dao treasury funds
**
**