Aave DAO approves $25M funding grant, token allocation for Aave Labs

Aave Labs, the core development team behind the Aave protocol, has been granted $25 million in stablecoins, alongside a token allocation of 75,000 $AAVE by its decentralized autonomous organization (DAO) as part of the “Aave Will Win” framework.

The vote passed Saturday with nearly 75% in favor. The stablecoin allocation will be paid in installments over 12 months, while the 75,000 $AAVE tokens will vest linearly over four years, according to the governance dashboard.

The Aave Will Win framework aims to accelerate the protocol’s growth, with the DAO funding development and Aave Labs focusing on building and scaling. The stablecoins directly fund Aave Labs’ operations, while the token allocation serves as an incentive for developers to help grow the protocol.

Other elements of the framework, including the growth and development grants tied to specific product launches and milestones, will have separate governance proposals.

Aave is one of the largest DeFi protocols in the industry, with its total value locked exceeding $25 billion, DeFiLlama data shows. The framework marks a major shift in funding allocation.

Most important proposal in protocol’s history, founder says

Following the vote, Aave founder Stani Kulechov said in an X post Saturday that Aave Will Win is the “most important proposal in Aave’s history” and it “just passed with a landslide.”

“If you own $AAVE, you own not just the economic rights of the protocol, but the brand, the users, and the integrations, he added. “This is the direction we are committing to, a multi-year journey. The foundation is set. Now it’s time to build. Aave will win.”

Under the framework, which passed on April 5, Aave Labs would shift to a DAO-funded operating model, with revenue generated by Aave products, such as Aave Pro, flowing to the DAO treasury rather than being retained by Aave Labs.

The proposal also sought ratification of Aave V4 as the protocol’s long-term technical foundation and outlined plans for a new foundation to steward the Aave brand. Aave Labs would also focus only on Aave-related products, with the goal of streamlining operations, accelerating development and building more competitive offerings.

“Fintechs are entering DeFi, institutions are coming on-chain, and regulatory clarity is emerging in certain markets that allows us to go directly to consumers,” Aave Labs said.

“The protocols that win the next decade will be those that move fast, build great tools and products and capture new markets before competitors,” it added.

Proposals met with friction before

Some community members have previously raised concerns about the size of the funding package and the inclusion of 75,000 $AAVE tokens, which carry voting power, and the definition of what counts as revenue.

Related: Chaos Labs taps out as Aave’s risk provider, decision ‘not made in haste’

The Aave Will Win framework passed a temperature check on March 1, and soon after, a major governance delegate, the Aave Chan Initiative, announced it would wind down its involvement with the DAO due to concerns about governance standards and voting dynamics during the proposal process.

In January, another proposal to transfer control of Aave’s brand assets and intellectual property to its DAO failed, prompting debate within the Aave community over the protocol’s long-term direction and governance structure.

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