The governance fight that began when Aave Labs redirected swap fees away from the DAO treasury in December is over, with the community voting in favor of the former.

Aave’s governance has passed the “Aave Will Win” (AWW) proposal, which founder Stani Kulechov called “the most important proposal in Aave’s history” on Sunday, approving a framework that redirects 100% of revenue from all Aave-branded products back to the DAO and consolidates economic rights under a single asset—the AAVE token.

This shift means the DAO is now responsible for funding Aave Labs’ activities. And the proposal passed Sunday approved a $25 million stablecoin grant and 5,000 AAVE token allocation (approximately $6.8 million) to Aave Labs.

Aave DAO, or decentralized autonomous organization, is a governance system that manages the Aave lending protocol, allowing token holders to vote on decisions such as upgrades, fees, and treasury use. It effectively acts as the community-run decision-making body for the protocol.

The vote resolves a dispute CoinDesk reported in December, when delegates flagged that the integration of trading aggregator CoWSwap into Aave's interface had quietly shifted swap-related fees away from the community treasury to an external recipient.

That controversy exposed a deeper tension over whether Aave Labs or the DAO controlled the protocol's most valuable asset: its user-facing products and the revenue they generate.

The so-termed 'Aave Will Win' (AWW) proposal answers that question decisively in favor of token holders. Protocol revenue, which hit $140 million in 2025 and is tracking to match that in 2026, now gets supplemented by application-layer revenue from Aave Pro, Aave App, Horizon, and Aave Kit. Swaps on Aave.com and Aave Pro are already generating $10 to $20 million in additional revenue on top of existing protocol fees.

"If you own AAVE, you own not just the economic rights of the protocol, but the brand, the users, and the integrations," Kulechov wrote. Aave Labs commits to working exclusively on Aave-related products under the new structure.

The application layer is where the ambition sits. Aave App will target mainstream users with what Kulechov described as a "fintech-like experience" with $1 million account protection per user and a card launching later that generates fees for the treasury.

The proposal takes a hard line against what Kulechov called "value leakage," the exact issue that triggered the December dispute. Service providers must build exclusively for Aave, with zero tolerance for relationship gating or products built for themselves at the expense of token holders.

"Payments for posting governance proposals are over," he wrote.

Every service provider will have measurable goals, and governance process improvements are planned to reduce what Kulechov described as politics and friction.

On the technical side, Aave V4's reinvestment feature turns idle float capital in lending pools into yield-generating positions, creating an additional revenue stream that did not exist in V3.

New "Spokes" expand collateral options and address the demand side of DeFi liquidity. The team also plans to invest in agentic AI infrastructure for developers building on Aave.

Aave holds roughly $25 billion in total value locked across multiple chains, making it the largest lending protocol in DeFi. The $140 million annual revenue figure puts it alongside Uniswap and Lido as one of the few protocols generating nine-figure income.

Kulechov's stated target is scaling from $40 billion to $1 trillion, positioning Aave not as a bank but as "a financial network that any fintech, bank, or asset manager can plug into."