Aave Labs Addresses DAO Rift With Revenue Sharing Plan

• Aave Labs will propose sharing revenue earned outside the core protocol with AAVE holders, addressing concerns over fee alignment.

• Governance disputes over frontend fees, branding, and IP control pushed Aave Labs to clarify value flow beyond the DAO.

• Aave’s strategy targets expansion into real-world assets and institutional products via V4, while keeping apps built by independents.

Aave Labs said Friday it will explore sharing revenue earned outside the Aave protocol with AAVE token holders, following escalating governance disputes. The announcement came through a public post by founder Stani Kulechov on the Aave governance forum. The move responds to community concerns over fees, control and long-term direction, while outlining how future products may generate aligned returns.

Revenue Sharing Plan Takes Shape

Aave Labs said it plans to submit a formal proposal detailing how external revenue would flow to AAVE holders. Notably, the revenue would come from activities outside the core protocol, rather than protocol fees.

According to Kulechov, the proposal will define structures, governance oversight, and risk safeguards. However, the firm has not yet released timelines or exact distribution mechanisms.

The statement followed weeks of debate over frontend fees redirected away from the Aave DAO. Some token holders questioned why those revenues did not accrue to the DAO. Aave Labs built the original protocol, although the DAO now maintains much of it. As discussions intensified, a December proposal sought to transfer Aave’s brand assets and intellectual property to a DAO-controlled entity.

Governance Dispute and Control Questions

The December proposal failed during a contentious governance vote. However, the outcome left unresolved questions about branding, ownership, and future contributions by Aave Labs.

The dispute also involved revenue from swaps routed through CoW Swap within the Aave ecosystem. Community members disagreed on whether that income should belong to the DAO or remain with Aave Labs.

During the debate, some participants highlighted Kulechov’s purchase of about $15 million in AAVE tokens. He denied attempting to influence the vote. Instead, he described the purchase as a reflection of personal conviction in the protocol’s future.

Expansion Beyond Crypto Lending

Alongside revenue sharing, Kulechov outlined a broader strategy focused on growth beyond crypto-native lending. He said Aave should expand into real-world assets, institutional lending and consumer products. According to Kulechov, Aave V4 will support these goals through modular architecture and isolated risk structures.

He also stated the DAO should not directly fund consumer applications. Instead, independent teams would build products on the permissionless protocol. Meanwhile, Aave would capture value through increased usage and protocol revenue.