Cracks Show at Aave as Chaos Labs Becomes Latest Exit. | Credit: CCN.
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Key Takeaways
The Aave community approved the “Aave Will Win” plan, strengthening DAO control over the protocol.
Revenue from Aave applications now flows directly to the DAO treasury for the token holder’s benefit.
Several major contributors exited during the governance dispute, citing strategic disagreements.
Aave, the decentralized finance (DeFi) giant with billions in total value locked, has resolved a tense governance standoff.
On Sunday, Apr. 12, the Aave DAO passed a binding on-chain vote approving the first major piece of the “Aave Will Win” framework.
This decisive outcome redirects 100% of revenue from Aave-branded products back to token holders and cements AAVE holders as the true economic owners of the protocol’s brand, users, and future growth.
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The vote concludes a month-long process following a narrowly passed temperature check in early March.
It delivers a clear victory for community control after months of heated debate over revenue sharing, brand ownership, and governance power.
The on-chain proposal, titled “Aave Will Win Framework: Primary Funding Request,” passed overwhelmingly with 522,780 AAVE votes in favor versus 175,310 against—roughly 75% support.
Aave community approves protocol control battle. Credit: Aave.
This strong margin represents a significant shift from the contested temp check, which scraped by with just 52.58% approval amid accusations of influence from Aave Labs-linked addresses
What Changes Under Aave’s New Framework
At its core, the “Aave Will Win” framework establishes a token-centric model.
Revenue from Aave-branded applications—including swap fees and new products like Aave App, Horizon, Aave Kit, and the upcoming Aave Card—now flows directly into the DAO treasury.
This removes earlier “value leakage,” where some application-layer fees were directed elsewhere.
In return, the DAO approved funding for Aave Labs, including a $25 million stablecoin allocation and 75,000 AAVE tokens vesting over 48 months.
Future funding for upgrades and new initiatives will require separate governance votes, maintaining DAO oversight.
With protocol revenue hitting $140 million in 2025 and projected to match or exceed that figure this year, the vote ensures token holders capture both core protocol fees and growing application-layer income—potentially adding $10–20 million annually from swaps alone.
What Sparked Aave’s Governance Crisis
The dispute began in December 2025, when Aave Labs integrated CoWSwap into the interface and redirected swap fees away from the DAO treasury.
Delegates quickly flagged the move as a breach of the original AIP-1 principle that AAVE token holders govern the protocol and its economics.
Tensions escalated over control of “soft assets” domains, social handles, trademarks, and the valuable aave.com frontend that drives most user traffic.
A December Snapshot vote proposing to transfer these brand assets to a DAO-controlled legal entity faced immediate backlash.
Critics called the process rushed and procedurally flawed; the proposal ultimately failed with 55.29% voting against and over 41% abstaining.
Prashant Jha is a seasoned crypto journalist based in Delhi, India, with a Bachelor’s Degree in Computer Science Engineering. Passionate about the evolving world of blockchain and cryptocurrencies, he has been a dedicated voice in the industry since 2018. Prashant’s expertise lies in regulatory reporting, where he unravels complex legal and financial developments with clarity and precision. Before joining CCN in 2024, he honed his craft at Cointelegraph, establishing himself as a trusted name in crypto journalism.
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