Aave Labs keep stating that all revenue will flow to the Aave DAO, thus the Aave token, but people just don't believe them. Are their concerns justified?
The community’s concerns regarding Aave Labs’ promise are highly justified. While Aave Labs recently proposed the "Aave Will Win Framework," which promises to direct 100% of Aave-branded product revenue to the DAO, community leaders and delegates have outlined severe structural flaws, past broken promises, and governance manipulation that make this claim highly suspect.
Here is why the community is deeply skeptical:
The headline of the proposal promises "100% of revenue," but the fine print defines revenue as gross product revenue minus partner revenue sharing, rebates, subsidies, and "additional direct user incentives".
Crucially, these deductions are entirely at Aave Labs' sole discretion, with no independent audit, no cap, and no DAO approval threshold.
Critics point out that Labs could unilaterally classify any product revenue they want as a "user incentive" and reduce or eliminate the revenue share flowing to the DAO whenever they see fit.
The DAO's skepticism is heavily fueled by a recent incident where Aave Labs was caught silently diverting revenue away from the DAO.
An independent investigator found that Labs had integrated CowSwap into the
aave.comfrontend and was charging a hidden 15–25 basis point "Partner Fee".Instead of this revenue flowing to the DAO (as it had under previous integrations), 100% of it was being routed to a private wallet controlled by Aave Labs, diverting roughly $5.5 million.
When confronted, founder Stani Kulechov admitted they should have been transparent, yet the diversion of funds continued and even accelerated to an annualized rate of $26.5 million before the new proposal was drafted.
Delegate Marc Zeller published a list of five distinct times Aave Labs agreed to governance terms but failed to follow through:
V3 Retroactive Funding (2022): Labs agreed to a one-to-two-year lock-up on AAVE tokens given to the team. The DAO approved it, but the lock-up was never enforced, and the tokens were simply transferred to a private team wallet.
Snapshot Control (2023): Labs promised to hand over the Aave Snapshot voting space to the DAO. Three years later, Labs still controls the infrastructure where voting happens.
V4 Budget (2024): Labs took a $12M budget to build V4, explicitly promising "no other payments" would be requested. Twenty months later, V4 is still not live, and Labs has returned to ask for an additional $51M.
Token holders are concerned that Aave Labs and its founder hold overwhelming, undisclosed voting power, rendering the DAO's "democratic" process obsolete.
On-chain analysis revealed that Labs-connected wallets control over 600,000 AAVE in voting power.
Recently, when the community tried to pass a "Mandatory Disclosures and Conflict-of-Interest" proposal, a single cluster of wallets tied to Labs cast a massive block of "NAY" votes to defeat the transparency measure.
Furthermore, Labs used this massive voting block to force through the "Horizon AIP" despite widespread community opposition.
Finally, the "100% revenue" offer is conditional on the DAO approving a massive funding request for Aave Labs. Labs is demanding $42.5 million in stablecoins and 75,000 AAVE tokens (worth ~$8.2 million), totaling roughly $51 million.
This represents over 31% of the DAO's entire treasury and 42% of its non-AAVE stablecoin reserves.
Community members argue that Labs isn't giving the DAO a gift; they are demanding $51 million to stop extracting revenue that should have belonged to the DAO in the first place. Furthermore, granting them another 75,000 AAVE tokens would only worsen their centralized control over DAO voting.
As one community member summarized, asking the DAO to trust an entity with $51 million when they have zero independent oversight, undisclosed voting power, and a history of broken promises makes this look less like a partnership and more like a "power consolidation move".