Aave Labs released a governance proposal (ARFC) in March called the “Aave Winning Framework,” proposing that 100% of the income from all Aave brand products be directly allocated to the DAO treasury, while also requesting $25 million in stablecoins and 75,000 AAVE tokens as a one-year development and operational budget.

Aave Winning Framework: Transitioning to a Structure Where DAO is the Sole Beneficiary

Under the current model, part of the income from Aave brand products is held by Aave Labs; the core change in the new framework is to directly funnel 100% of the income from all brand products into the DAO treasury, making the community the sole beneficiary of the income.

Aave Labs also commits to only developing products directly related to the Aave ecosystem in the future, and will no longer establish any independent sources of income. This commitment structurally strengthens the alignment of interests between developers and the DAO community: the DAO funds development activities, and all income generated from these development activities will flow back to the DAO.

Currently, the Aave protocol generates over $100 million in annual income for the DAO, making it one of the largest income-generating protocols in the DeFi space. If this framework proposal is passed, approximately $10 million in annual swap fees will additionally be incorporated into the DAO treasury, expected to further expand the DAO’s resource base.

Financial Planning: $25 Million Budget Structure and Incentive Design

Although the DAO will become the sole beneficiary of all income, Aave Labs still proposed a one-year operational fund request, with specific allocations as follows:

Stablecoin Request: $25 million, to support one year of development costs and business growth

AAVE Token Request: 75,000 tokens, with a four-year lock-up period, to be released in phases to ensure alignment of long-term interests between the team and the DAO

Product Incentive Budget: Approximately $17.5 million, for user growth plans for Aave App and Aave Pro

Funding Release Mechanism: Funds will be disbursed in phases based on predefined milestones, rather than as a lump sum, to ensure performance-driven funding flow

The proposal also lists the promotion of Aave V4 technology as a separate voting issue to avoid binding too many governance variables to a single proposal, thereby reducing resistance to approval.

Accountability Mechanism: Quarterly Reports and KPI-Driven Transparency Framework

Aave Labs will provide progress updates to the community every three months, covering the use of funds and key performance indicators (KPIs) for each product.

The tracking dimensions for each product are as follows: Aave App will focus on user registration and assets under management (AUM) as core indicators; Aave Pro will track institutional trading activity and user adoption rates. This accountability system aims to establish a quantifiable and publicly verifiable trust basis between DAO funding support and the performance of the development team, while also allowing the community to evaluate budget usage efficiency in a timely manner.

Frequently Asked Questions

What is the core logic of the Aave Winning Framework?

The “Aave Winning Framework” aims to funnel 100% of the income from Aave brand products into the DAO treasury, replacing Aave Labs with the community as the sole beneficiary. Aave Labs will transition to a development service provider contracted by the DAO, supported by the budget, with long-term interests bound through a four-year token lock-up mechanism.

Why is Aave Labs applying for $25 million while giving up all income?

The request for $25 million in stablecoins and 75,000 AAVE tokens is for the service fees of development commissioned by the DAO, to cover development costs, personnel operations, and product incentive plans, rather than independent profits for Aave Labs. Funds will be released in phases based on milestones to ensure performance is linked to funding.

What governance stage is the proposal currently in?

As of the proposal’s release, it is in the community review stage of ARFC (Aave Request for Comments) and has not yet entered formal voting. After completing community feedback, it will proceed to a Snapshot vote, ultimately to be approved or rejected by Aave’s on-chain governance.