AAVE Labs proposed transferring 100% of its product revenue to the AAVE DAO treasury through the “AAVE Will Win Framework” initiative to resolve conflicts with the community.
The flagship software developer behind AAVE Protocol held an informal preliminary survey on Thursday, February 12th, to gather feedback on the likelihood of the DAO approving the new initiative. This move is likely aimed at resolving recent disagreements between the for-profit private software technology company and the community-led decentralized autonomous organization, while also bolstering the long-term success prospects of one of the market's leading decentralized lending protocols.
According to sources familiar with the matter who wished to remain anonymous due to the private nature of the exchanges, the core contributors are committed to transferring all income from AAVE branded products such as AAVE v3, swap fees for the upcoming v4 protocol, revenue from AAVE, and future initiatives such as the AAVE Card and AAVE ETF into the AAVE DAO treasury. The goal of the plan is to position Token holders as the primary beneficiaries of the AAVE protocol.
Mixed reactions and the context of the dispute.
The proposal also includes the establishment of a new AAVE Foundation to manage trademarks and intellectual property assets, representing a fundamental shift in ownership model as a “learn-and-test” initiative to manage billions of dollars worth of brands through DAOs. However, this suggestion has received mixed reactions. Some have expressed concerns, while others question whether significant losses will arise as AAVE Labs commits to shifting its revenue model.
Marc Zeller, founder of the AAVE Chan Initiative and a key member of the AAVE DAO, noted that this could be a familiar strategy: start with an extreme claim, face backlash, then make smaller demands such as a fair compromise while still reaping significant benefits. The revenue allocation decision comes after months of uncertainty surrounding the ownership of AAVE between the AAVE DAO – the organization leading the lending protocol since Governance Token launch – and AAVE Labs – the original brand developer.
The controversy originated last December when AAVE Labs decided to redirect swap fees from the official AAVE website to a private wallet managed by the company, whereas these contributions previously served as the source of the AAVE DAO treasury.
In response, an anonymous Token holder proposed a “poison pill” mechanism to gain control over the company’s intellectual property, source code, trademarks, and shares. However, in a governance vote held during the holiday, the proposal to make the company a subsidiary of the DAO was not approved.
This result prompted Stani Kulechov, founder and CEO of AAVE Labs, to initiate discussions about revenue Chia and brand positioning. Sources revealed that this coincided with a significant restructuring phase at AAVE Labs, including the termination of non-lending Web3 initiatives under the Avara brand.
