Aave’s governance community has approved an overhaul in how core development is funded, unlocking a $25 million grant package for Aave Labs.
Aave token holders have approved a new funding arrangement for Aave Labs, the main development team behind the Aave lending protocol.
The snapshot vote ended with over 522,000 in favor and about 175,000 against, passing the proposal, according to the voting page results. The approved plan includes a $25 million grant in stablecoins plus 75,000 AAVE▼$73.90 tokens, which will be released gradually over four years.
- Part of the stablecoin funding is being released through streaming payments managed by Aave’s Collector Contract.
- This includes 5 million units of the stablecoin aEthLidoGHO over six months and another 15 million units over a 12-month period.
Read more: Bank of Canada Finds DeFi Lending Viable, But Messy
Aave Labs Funding Shifts to DAO Treasury
The proposal mainly changes how money flows through the system. Instead of Aave Labs keeping revenue from Aave-branded products, that income is meant to go back into the DAO treasury. Then, the treasury funds the team through grants.
- The voting process wasn’t entirely smooth, mainly over how the funding is structured over time. Some flagged it as a pretty long-term commitment for the DAO to take on, especially given the roughly $47.5 million total package, which some note is about 30% of the DAO treasury.
- Others also pointed out that Aave Labs has broad discretion over what counts as “revenue” and how it’s adjusted before funds reach the DAO, raising concerns about weak oversight.
Nonetheless, markets reacted positively after the vote, with AAVE rising about 4.2% to $93.9, per data from CoinGecko.
Read also: AAVE Price Drops 6% as Chaos Labs Quits Over ‘Fundamental Misalignment’
