Aave Labs on Friday said it plans to share revenue generated outside the core Aave Protocol with AAVE token holders and formally address intellectual property rights in an upcoming proposal, as the DeFi heavyweight moves to defuse a growing controversy over value capture and governance alignment.
The announcement follows weeks of debate within the Aave community over whether commercial products built by Aave Labs, particularly those targeting real-world assets and institutional users, are extracting value from the ecosystem without sufficiently benefiting token holders.
Aave founder Stani Kulechov said the protocol has reached a “crossroads,” warning that optimizing only for crypto-native lending risks limiting long-term growth while well-capitalized traditional finance players accelerate their push into blockchain-based markets.
What Sparked The Controversy
The dispute intensified around Aave Labs’ expansion beyond traditional DeFi lending into areas such as real-world assets and consumer-facing applications.
While these initiatives aim to bring institutional capital and new users into the ecosystem, critics within the DAO raised concerns about governance, branding, and revenue distribution.
At the center of the debate was whether application-layer products developed by Aave Labs could operate under the Aave name while charging their own fees, without a clear mechanism to return value to AAVE token holders.
Some community members argued that this risked weakening the token’s economic role even as the broader ecosystem grew.
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The issue also touched on intellectual property rights, with delegates seeking clarity on who controls branding and technology when products are built by commercial entities rather than directly by the DAO.
Revenue Sharing And IP Guardrails Planned
In response, Aave Labs said it will propose a structure to share non-protocol revenue with token holders, signaling a shift toward tighter alignment between builders and the DAO.
While details have not yet been disclosed, Kulechov said alignment is essential if Aave is to scale beyond its current crypto-centric use cases.
The proposal is also expected to include guardrails around branding and IP usage, addressing concerns that the Aave name could be diluted or monetized without sufficient oversight from token holders.
Aave Labs emphasized that it does not believe the DAO should directly fund or operate consumer products, citing the capital intensity, regulatory complexity, and speed required to compete with traditional financial platforms.
Instead, the protocol would remain open and permissionless, while independent teams build products that drive usage and revenue back to the core infrastructure.
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