Aave Labs moves to ease governance tensions with non-protocol revenue sharing

Aave founder Stani Kulechov is offering an olive branch to AAVE token holders amid a contentious debate between Aave Labs and the protocol’s governing DAO, saying the R&D firm could distribute non-protocol revenue to token holders, in a significant governance post on Friday.

“Given the recent conversations in the community, at Aave Labs we are committed to sharing revenue generated outside the protocol with token holders,” Kulechov wrote. “Alignment is important for us and for AAVE holders, and we’ll follow up soon with a formal proposal that will include specific structures for how this works.”

The move comes amid an ongoing governance debate in the Aave community over profit sharing and key ownership questions regarding the largest DeFi lending protocol.

This debate was kicked off by a token holder who raised questions about an Aave Labs decision to redirect frontend fees away from the Aave DAO. Aave Labs built the first version of the Aave protocol, though Aave DAO is the cooperative that largely maintains it today.

Kulechov argued that both parties must align on a “long-term vision” to grow Aave beyond “its current crypto-native use cases,” and “support new asset classes and lending models, such as real-world assets, consumer-facing and institutional lending, etc.”

“We believe the most effective path forward is to allow opinionated teams to build products independently on top of the permissionless Aave Protocol, while the protocol itself captures upside through increased usage and revenue,” Kulechov said.

In addition to potentially sharing profits, Kulechov’s post addressed finding a resolution “with respect to branding,” responding to further demands for Aave Labs to relinquish Aave intellectual property to the DAO.