Aave Labs and ACI just published dueling reports on the same day.
Labs released a "Contributions Report" making the case they built everything: V1, V2, V3, eMode, GHO, Flash Loans, the Safety Module.
ACI responded with a detailed counter showing Labs' actual record since V3.0: six failed standalone products, lost BD deals, $86M received with zero accountability reports ever published.
Both sides are trying to shape the narrative before the "Aave Will Win" vote.
I'm an Aave delegate and I've been following this closely. I wrote about the CoW Swap controversy back in December and voted against the Horizon deployment because I saw the conflict escalating.
But I will try to be honest about what I really care about here. And what every retail investor and institution holding AAVE cares about too:
Will this make the token go up?
Token price goes up when the protocol does well: TVL grows, revenue grows, Aave stays competitive, and token holders actually capture the value.
Because we've seen plenty of cases in crypto where protocol success doesn't convert to token performance.
That's why Aave Labs proposal to 1) give 100% to token holders and 2) give Aave IP rights to token holders is so sexy.
I wish Aave had futarchy governance.
It's a model where prediction markets replace traditional voting. Instead of token-weighted votes where whales push through whatever they want, the market would show whether a proposal is expected to increase or decrease the token price.
GnosisDAO just approved a 9-month pilot to test this with GNO. Still early, but the idea is very cool.
Imagine if Aave had this. A live market signal on whether AWW pumps or dumps AAVE. No narrative games, no undisclosed voting power, just pure price discovery (and fun speculation for degens).
Aave doesn't have futarchy. So we need to read what the market tells us through actual price action.
What the market says
AAVE/ETH is the honest chart here. It removes the broader crypto crash and shows how AAVE performed relative to its base asset.
When AWW was announced on Feb 12, AAVE/ETH pumped by 6.6%. Very gud.
The market liked the revenue alignment: 100% of product revenue to the DAO, IP rights to a foundation. Real value accrual for token holders.
Then BGD Labs announced they're leaving on Feb 20. AAVE/ETH dropped 8.9% in a single day, erasing the entire AWW pump.
Very bad :(
The market told us exactly what matters. Revenue alignment: good. Losing key contributors: bad.
And then there's the MORPHO/AAVE ratio. @0xLouisT posted this chart and the picture is ugly.
Since the AWW proposal, MORPHO has roughly doubled against AAVE. The protocol with a fraction of Aave's TVL and zero protocol fees is outperforming the dominant lending protocol.
Both are trading at the same FDV.
That should worry every AAVE holder.
Morpho is winning institutional deals (Coinbase, Apollo) while Aave deals with internal governance drama.
What AWW gets right
The revenue alignment is genuinely good. For the first time, 100% of Aave-branded product revenue would go to the DAO treasury. That includes the swap fees from aave.com (currently ~$10M annualized), plus future revenue from Aave App, Aave Pro, Aave Card, and Aave Kit.
"We are now entering one of the most important periods that will determine Aave's success going forward. Fintechs are entering DeFi, institutions are coming onchain, and regulatory clarity is emerging." - [TEMP CHECK] Aave Will Win Framework
Moving IP rights to a foundation controlled by AAVE holders is also the right direction.
I also believe Labs should be generously rewarded.
We've seen what happens when builders aren't paid well. Ethereum Foundation devs leave for better-funded projects. Labs should not be in a position to beg the DAO for funding, especially if they're giving up their own revenue streams.
Blockworks Advisory shared the numbers on comparable protocol spending. Lido's 2026 budget is ~$60M. Uniswap is asking for ~$70M. MakerDAO/Sky was burning ~$100M in 2025 including sub-DAOs.
Labs asking for $51M in that context is not inherently unreasonable.
The question is what the DAO gets in return.
What worries me
Generous pay requires accountability. Labs has received $86M total (ICO, VC, DAO payments, CoW Swap fees) and never published an accountability report (not my words but those of DAO delegates).
Compare that to ACI: $4.6M spent, $142.9M attributed revenue, 3.4 cents per dollar and onchain verified.
Zeller said that the proposal is "four proposals in a trenchcoat."
deductions are:
"at Aave Labs' sole discretion. No independent audit. No cap. No DAO approval threshold." - Marc Zeller
It's not just Marc, but others also care about responsibility:
Then the track record.
V3.0 as Labs shipped it generated $3.33M in DAO revenue.
Very good! But...
...after BGD rebuilt it into V3.1-V3.7, after Chaos Labs calibrated risk, after TokenLogic managed treasury and ACI ran governance, the same protocol generated $179M.
That's 98.2% of V3 revenue from versions other teams shipped. The engineers who built V1-V3.0 all left Labs years ago. The team asking for $51M is not the same team that wrote the code.
Meanwhile Labs was distracted building Lens, Family wallet, other Avara ventures.
Look, I love experimentation in crypto and teams trying new things but ... all these endeavors failed.
Avara was retired Feb 3, 2026.
"Stani returned his full attention to Aave because everything Labs tried outside Aave failed." - Marc's words. Not mine.
The BD results and centralization risk
Labs claims institutional BD as a core strength.
The results (from ACI's report) say otherwise.
Coinbase chose Morpho. Apollo ($938B AUM) bought 90M MORPHO tokens. WLFI, a deal ACI sourced and won, never launched on Aave after Labs took over. They went to Dolomite.
MegaETH and Mantle deployed the same week. Labs managed MegaETH: $19.4M deposits, with some bugs on the frontend.
DAO providers managed Mantle: $736M.
(To be fair to MegaETH proposal, they agreed on a minimum fees paid to the DAO, so it won't bring negative ROI in the longer term. So it is still a good deal).
This matters for token price because Aave's dominance was built by multiple teams checking each other's work.
BGD just left and token price didn't like it. Their departure post:
"Aave Labs believes that the whole Aave DAO and contributors should pivot in the direction they believe in, without sufficient consideration of existing contributors' expertise."
And:
"Every time we think/will think about improving v3, there will be some type of implicit/explicit artificial constraint." - Source in the forum.
This pattern started before AWW.
When BGD proposed V3.4 improvements in March 2025, Stani opposed publicly:
"This direction of frequent protocol updates is playing with fire." He called V3 "deprecated." The codebase generating $140M/year.
Source here.
"Whole point of decentralization is to create resilient systems where the users do not need to trust us as the developers or rely on anyone else to ensure functionality of the system."
V4 is still on testnet. Zero revenue. A few audits (which is good). But Labs wants to freeze V3 features and "gradually adjust parameters to encourage migration."
@DeFi_EzR3aL asked the obvious: "If v4 for example fails and we push users out of v3, the DAO is at risk of not being able to survive."
This would nuke $AAVE bags.
Importantly, fewer teams means fewer eyes on code, fewer checks on risk, more concentrated decisions. For a protocol securing billions in USD, that directly impacts depositor confidence, TVL, revenue, and token price.
Traders and holders understand this:
BGD left, if ACI lefts after and only Aave Labs controls the security, expenditures, the DAO etc... What happens to the token price?
The bundled vote and what I want to see
AWW bundles revenue alignment, V4 ratification, foundation creation, and $51M funding into one vote.
ACI traced 663K votes to a single cluster connected to founding Aave team.
That's enough to swing any contested vote.
I support revenue alignment. I support the IP foundation. I support paying Labs well.
Before voting yes on the full package, I want:
an accountability report like ACI's.
AAVE holdings disclosure.
Consider 4-year vesting for 75k AAVE as standard, not 2.
V3 freeze only after V4 proves itself in production.
And unbundle the vote. Let each part stand on its own.
Big plus: Work on maintaining Aave Service providers from leaving.
Lastly, it is worrying that after so much feedback there were no edits to the original proposal.
The bottom line
The market gave us a futarchy-style signal. It pumped on revenue alignment and dumped on contributor loss.
MORPHO is outperforming AAVE while charging zero fees with a fraction of the TVL. The market is saying governance dysfunction hurts more than $140M in revenue helps.
Aave's dominance was built by multiple teams competing and collaborating. That model produced $140M in 2025. Consolidating everything under one entity is how you lose it.
Pass the parts that pump our bags. Fix the parts that don't.
"Aave will win" means $AAVE token pumping.
