AAVE Founder Proposes Token Holder Revenue Sharing After Governance Dispute

• Aave founder Stani Kulechov proposed sharing off-protocol revenue with AAVE token holders after a governance dispute.
• The model aims to distribute fees from frontend swaps and product integrations back to token holders.
• New governance safeguards will formalize brand and IP frameworks while enabling innovation.
• Critics raise centralization concerns while proponents see institutional expansion potential.

Aave (AAVE) is taking steps to resolve internal governance tensions through a proposed revenue-sharing model. Founder Stani Kulechov announced plans to distribute off-protocol income to token holders after a contentious DAO vote failed. This initiative targets revenue streams like frontend swap fees generated outside the core protocol. Market reaction proved positive with AAVE jumping 10% on the announcement.

What Is the Revenue-Sharing Proposal for AAVE Holders?

Kulechov's proposal would share earnings from non-core activities with token holders. This includes fees from the Aave app interface and future product integrations developed independently. The model creates passive income potential while maintaining DAO control of core intellectual property. A formal structure detailing percentage splits and distribution mechanics remains forthcoming.

Safeguards will prevent abrupt changes to revenue-sharing terms under the new framework. This addresses concerns about Aave Labs retaining excessive control over interface-level earnings. The proposal specifically excludes protocol-native revenue to avoid destabilizing existing incentives.

Final details are expected in an upcoming governance vote.

Why Did Aave's Governance Vote Fail?

Tensions erupted when the DAO rejected transferring brand assets to community control last year. That 2025 vote highlighted disagreements over profit allocation and protocol ownership. Critics accused Aave Labs of diverting potential revenue streams through what they called stealth privatization. The failed vote exposed friction between centralized execution and decentralized governance ideals.

DAO members sought greater authority over profit streams generated through the Aave brand. Kulechov acknowledged concerns about the protocol's reliance on volatile crypto market cycles. The revenue-sharing plan emerges as a compromise after that governance setback. It attempts to balance community alignment with operational flexibility.

How Will Revenue Sharing Impact Aave's Future?

The proposal positions Aave as a foundational DeFi layer for institutional expansion. Kulechov emphasized Aave V4's real-world asset integration capabilities targeting $500 trillion markets. Sharing earnings could enhance token utility and investor trust ahead of that growth. This evolution supports independent teams building atop Aave's protocol.

Successful implementation may resolve profit-sharing debates that plagued recent governance. Token holders gain tangible value capture beyond speculative appreciation. That alignment could strengthen Aave's competitive position against lending rivals. Yet questions persist about power distribution between Aave Labs and the DAO.