Aave Labs announces revenue sharing proposal
Aave Labs has decided to share some of its revenue from activities outside the main protocol with AAVE token holders. The company plans to submit a formal governance proposal soon that will detail exactly how this revenue sharing will work. They’re also including governance and risk safeguards in the proposal, which I think makes sense given how important it is to protect the long-term interests of both the DAO and individual token holders.
This move comes after some community debates within the Aave ecosystem. Honestly, it feels like a response to pressure from token holders who want more direct benefits from the protocol’s success. The company says this approach will improve ecosystem cohesion and create long-term value, which sounds reasonable enough.
Growth concerns and expansion plans
In a recent assessment shared by founder Stani Kulechov, Aave Labs acknowledged that despite the protocol’s strong position in DeFi, its current growth rate isn’t where they want it to be. The statement pointed out that Aave currently focuses mostly on lending activities around ETH, BTC, and leveraged strategies. But their original vision was much broader – they wanted to provide lending through smart contracts across a wide range of assets.
What’s interesting is their focus on real-world assets. They’re talking about building infrastructure that could eventually support hundreds of trillions of dollars in asset classes through RWA and similar instruments. With traditional finance players showing more interest in crypto markets, they believe focusing only on the existing DeFi market won’t be enough.
Aave V4 and GHO stablecoin developments
Aave V4 seems to be central to their expansion plans. The new version will apparently open up new use cases like RWA-backed loans, borrowing through custodians, and brokerage integrations. They’re using a modular architecture that allows different risk profiles to be isolated, which they say will encourage innovation while protecting protocol security.
The roadmap also gives GHO, Aave’s stablecoin, a significant role. The goal is for GHO to become a centralized savings and liquidity tool that provides access to new RWA-based yield and lending opportunities. That’s quite an ambitious target, but perhaps achievable given their position in the market.
What this means for the ecosystem
This whole revenue sharing proposal feels like a shift in how they’re approaching governance and community relations. By directly sharing revenue from off-protocol activities, they’re creating a more tangible connection between the protocol’s success and token holder benefits.
The timing is notable too. With institutional interest growing and the broader market evolving, Aave seems to be positioning itself for a different kind of growth phase. Whether this revenue sharing model will actually work as intended remains to be seen, but it’s certainly a significant development in how DeFi protocols are structured and governed.
I’m curious to see how the formal proposal will be received by the community. Governance proposals can sometimes be contentious, especially when they involve revenue distribution. But if they’ve included proper safeguards and thought through the implementation, it could strengthen the protocol’s position in an increasingly competitive market.
