All Revenue Now Flows to DAO
Aave’s decentralized governance has approved a sweeping change to its economic model. On April 5, nearly 75% of voting power backed the “Aave Will Win” proposal, which redirects 100% of revenue from all Aave-branded products directly to the DAO treasury. This includes income from Aave Pro, Aave App, Horizon, and Aave Kit—products that collectively contributed to protocol revenue of $140 million in 2025, with projections indicating a similar figure for 2026.
Previously, some product fees—such as those from swaps on Aave.com and Aave Pro—were generating an extra $10 to $20 million on top of existing protocol fees but were not always routed back to the DAO. Under the new framework, these funds will now be consolidated under DAO control.
The DAO’s treasury is now set to receive all revenue streams, including those from Aave Pro and Aave App, starting from April 2024.
$25 Million Grant Signals
The vote also authorized a substantial funding package: $25 million in stablecoins and 75,000 AAVE tokens (worth about $6.8 million) for Aave Labs. The stablecoin grant will be distributed over twelve months, while the token allocation vests linearly over four years. This arrangement marks a shift in how core contributors are compensated and funded.
On paper, this grant secures resources for Aave Labs—but it also ties their funding more closely to the DAO’s oversight.
According to cointelegraph.com, the approval of these grants followed months of debate within the community about how protocol revenues should be managed and who should benefit from them. The vote’s outcome means future growth and development grants will require separate governance proposals.
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Token Holders Claim Economic Rights
A core aspect of the “Aave Will Win” proposal is consolidating all economic rights under a single asset: the AAVE token. This means that holders of this token now have direct claim over all protocol revenues flowing into the treasury. The change follows tensions that surfaced in December 2025 when it was discovered that swap fees from an integration with CoWSwap had been redirected away from the DAO treasury to an external recipient.
In practical terms, this means that every dollar generated by Aave-branded products—whether through lending pool activity or swaps—now ultimately accrues to token holders via the DAO. With total value locked on Aave exceeding $25 billion according to DefiLlama, these changes could have significant implications for both governance participation and token value.
Dissenters Lose Out in Landmark Vote
Despite broad support for the proposal, dissent was notable. The largest opposing vote came from the Aave Chan Initiative, whose founder Marc Zeller had previously voiced concerns about centralizing too much power or revenue flow under a single structure. Zeller’s opposition highlights ongoing debates about decentralization versus operational efficiency within major DeFi protocols.
There is also uncertainty surrounding how future grants or compensation packages will be structured for contributors not directly affiliated with Aave Labs. For example, BGD Labs—a key infrastructure contributor—exited in early April citing governance tensions with Aave Labs.
V4 Upgrade Unlocks Idle Capital
The passing of “Aave Will Win” ratified Aave V4 as the protocol’s long-term technical foundation. Launched on March 30, V4 introduces a reinvestment feature allowing idle float capital in lending pools to be deployed into yield-generating positions. This creates a new revenue stream for the DAO on top of existing protocol fees and swap income.
With all product revenues now flowing into the treasury and new mechanisms like V4’s idle capital deployment coming online, Aave’s governance has positioned itself for potentially higher yields—and greater accountability—over how those funds are allocated.
What the market is waiting for
The market is watching for the first installment of the $25 million stablecoin grant to Aave Labs, scheduled to be paid over the next 12 months; if the DAO fails to execute these payments as approved in the April 5 vote, Aave Labs’ ongoing development activities could face immediate funding uncertainty.
