Aave shifts toward revenue sharing model
Aave Labs has announced it will share revenue from off-protocol activities with AAVE token holders. The company plans to submit a formal governance proposal detailing how this revenue sharing will work. They’re also including governance and risk safeguards to protect long-term interests of the DAO and token holders.
This move comes after some community debates within the Aave ecosystem. I think it’s interesting they’re making this shift now. Perhaps they’re responding to pressure from token holders who want more direct benefits from the protocol’s success.
Growth concerns and expansion plans
In a statement from founder Stani Kulechov, Aave Labs acknowledged that despite the protocol’s strong position in DeFi, current growth rates aren’t sufficient. The protocol mainly focuses on lending around ETH, BTC, and leveraged strategies. But their original vision was broader – lending across many more assets.
They’re looking at real-world assets as a major opportunity. The thinking is that institutional finance players are getting more interested in crypto markets. Aave can’t just focus on the existing DeFi space if it wants to grow significantly.
V4 architecture and GHO stablecoin role
Aave V4 is central to these expansion plans. The new version will use a modular architecture that isolates different risk profiles. This should allow for new use cases like RWA-backed loans, borrowing through custodians, and brokerage integrations.
The modular approach is supposed to encourage innovation while protecting protocol security. It’s a balancing act, really. More features mean more complexity, but the isolation of risks might help manage that.
GHO, Aave’s stablecoin, will play a significant role in this expansion. The goal is for GHO to become a central savings and liquidity tool. It would provide access to new yield opportunities based on real-world assets.
Looking ahead
Aave Labs says this revenue sharing approach will enhance ecosystem cohesion and create long-term value for token holders. They’re framing it as both a response to community concerns and a strategic move for growth.
The formal proposal will be submitted soon. It’ll be interesting to see how the community responds to the specific details. Revenue sharing models can be tricky to implement fairly, especially when balancing different stakeholder interests.
What strikes me is the scale they’re talking about – hundreds of trillions in asset classes through real-world assets. That’s ambitious, to say the least. Whether they can actually achieve that kind of scale remains to be seen, but the direction is clear: expand beyond current DeFi boundaries into broader financial markets.
