Aave Governance Vote Nears Amid $86M Capital Review

A governance dispute inside the Aave ecosystem intensified after two detailed reports offered contrasting interpretations of the protocol’s past funding and contributions ahead of a vote on a proposed $50 million package for Aave Labs. 

Aave Chan Initiative (ACI) founder Marc Zeller on Wednesday published what he called a transparency report reviewing Aave Labs’ historical funding and applied a return-on-investment framework to past DAO grants. Hours earlier, Aave Labs released its own contributions report outlining its role in building the protocol since 2017.

The dispute centers on the “Aave Will Win” framework, a proposal asking tokenholders to approve funding worth up to $42.5 million in stablecoins and 75,000 AAVE (AAVE) tokens. In return, Aave Labs would route 100% of revenue from Aave-branded products to the Aave DAO treasury under a DAO-funded operating model, according to the proposal and related forum posts.

The debate has broadened beyond the size of the funding request to include questions about accountability standards, revenue attribution and who maintains the protocol’s core infrastructure.

It follows the recent announcement that BGD Labs, a core technical contributor, will conclude its involvement with the DAO on April 1. 

Competing views on funding and value

Zeller’s report said Aave Labs has received about $86 million in lifetime capitalization, including its 2017 initial coin offering (ICO) proceeds, venture funding and DAO payments. 

He argued that future DAO grants should be evaluated using measurable revenue impact and clearer disclosure standards. 

ACI, a service provider to the Aave DAO and not a neutral party in the debate, questioned whether governance votes should be unbundled to separate funding, revenue alignment and V4 ratification.

Zeller wrote that funding decisions should be tied to performance benchmarks and transparent reporting. 

Aave Labs, in its contributions report, highlighted its role in designing and shipping Aave V1, V2 and V3, and highlighted features it said underpin the protocol’s current revenue model, including flash loans, the Safety Module and Efficiency Mode.

Aave Labs argued that counting governance proposals or forum posts does not reflect the full scope of research, development, security and infrastructure work required to maintain a protocol used by millions of users. 

What tokenholders are voting on

Under the “Aave Will Win” framework, Aave Labs would transition to a DAO-funded operating model while directing product-level revenue, including from aave.com and planned consumer-facing products, to the DAO.

Related: Curve Finance founder says disagreement within a DAO is a healthy sign

The proposal also seeks ratification of Aave V4 as the protocol’s long-term technical foundation and outlines plans for a new foundation to steward the Aave brand.

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.

On Feb. 13, critics called for clearer definitions of revenue and greater transparency around governance holdings.

The Snapshot vote, scheduled for Thursday, is an initial offchain vote that gauges community sentiment before any binding onchain proposal is submitted.