Aave Labs has unveiled a sweeping proposal that would fundamentally reshape the governance and economics of the Aave ecosystem.
Central to the new framework is Aave v4, a long-awaited upgrade designed to unlock new revenue streams, allowing the protocol to expand into new markets with custom risk parameters. Aave v3 currently generates over $100 million in annualized revenue. Labs proposes gradually winding down v3 within 8–12 months after v4’s launch.
Critics, including Aave Chan Initiative founder Marc Zeller, argue the proposal amounts to a $50 million extraction disguised as decentralization. Zeller questioned the governance process, suggesting the company is attempting to dictate outcomes without sufficient consultation.
FAQ️ What is Aave Labs proposing? To send 100% of product revenue to the Aave DAO treasury. What happens to Aave’s IP? The proposal includes a plan to move Aave’s IP to a new Aave Foundation. How much funding is Labs requesting? Up to $50 million in stablecoins, AAVE tokens, and grants. Why is this controversial? Some DAO members see it as a cash-out attempt.
