Aave Labs, the leading software development company and key contributor to the Aave protocol, recently proposed that all product revenues be directed to the Aave DAO treasury, the financial backbone of the decentralized lending protocol.
The move is likely an effort to settle the recent disagreement between the private, for-profit software technology company and the community-led, decentralized autonomous organization. Besides this finding, analysts also noted that this action guarantees the future success of the leading decentralized lending protocol.
Regarding this milestone of 100% revenue allocation, Aave Labs requested feedback on the DAO’s potential approval of a new initiative, the “Aave Will Win Framework”, during an initial informal survey held on Thursday, February 12. The objective of this plan is in particular to position token holders as the main beneficiaries of the Aave protocol.
Aave Labs proposal sparks mixed reactions in the ecosystem
Following the recent announcement from Aave Labs proposalSources with knowledge of the situation and wishing to remain anonymous as the discussions were private revealed that major contributors to the Aave protocol are committing 100% of the revenue, derived from Aave-branded products like trading fees from the upcoming Aave v3 and v4 protocols, revenue from aave.com and other future projects such as the Aave Card and AAVE ETF, to the Aave DAO treasury.
These sources also alleged that Aave Labs proposed creating a new Aave Foundation to manage Aave’s trademarks and intellectual property. A.Reports indicate that this suggestion received mixed reactions from individuals. Critics have begun to raise concerns about the move, although the proposal represents a fundamental shift in Aave’s ownership, positioning it as a test-and-learn initiative for running a multibillion-dollar brand through the DAO.
On the other hand, some people wonder if a significant loss would actually occur when Aave Labs follows through on its commitment to reorient its revenue model.
In an attempt to answer this question, Marc Zeller, founder of the Aave Chan Initiative and senior member of the Aave DAO, mentioned, “I want to clarify what’s really going on here,” adding, “We’ve seen this strategy before: start with extreme demands, deal with the pushback, and then present a smaller request as a ‘fair compromise’ while remaining very firm.”
At the same time, it is worth noting that the decision on revenue allocation was made after months of uncertainty over the ownership of Aave, the decentralized autonomous organization (DAO) that has guided the lending protocol since the introduction of its governance token, and Aave Labs, the original developer of the brand.
Stani Kulechov begins negotiations on revenue sharing and branding
Regarding Aave Labs’ suggestion, reports point out that the development arm of the Aave protocol also sparked controversy in the community last December after it decided to redirect swap fees from the official aave.com website to a private wallet managed by the company. Notably, these contributions previously supported the Aave DAO treasury.
In response to this action, an anonymous token holder suggested a “poison pill” mechanism to claim intellectual property, code, brand assets, and shares of the software technology company. However, during a governance vote held during the holidays, this decision to transform the company into a subsidiary of the DAO was not adopted.
The result apparently prompted Stani Kulechov, founder and CEO of Aave Labs, to begin discussions about revenue sharing and branding. Meanwhile, sources have revealed that this event coincides with a period of substantial restructuring at Aave Labs, including the end of its off-lend Web3 initiatives under the Avara brand.
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