Why Aave Labs Is Putting Itself at the Mercy of the DAO

Speakers

Laura Shin — Host

Stani Kulechov — Founder of Aave Labs

Summary

Aave Labs has proposed "Aave Will Win," a strategic shift to direct 100% of Labs' product revenue (including the new Aave app and GHO stablecoin integrations) to the Aave DAO, effectively betting the company's future on the token's success.
The proposal introduces Aave V4, utilizing a "Hub and Spoke" model to isolate risk while pooling liquidity, specifically designed to onboard Real World Assets (RWAs).
Stani Kulechov presents a macro thesis on "Abundance Assets" (Solar, AI, Robotics), arguing that DeFi's next growth phase will come from funding capital-intensive, low-OpEx technologies rather than just trading crypto assets.
The protocol demonstrated resilience by liquidating over $500M in collateral automatically during recent volatility without incurring bad debt, contrasting sharply with the failures of centralized lenders like Genesis or BlockFi.

Trade Ideas

Ticker	Direction	Speaker	Thesis	Time
AAVE	LONG	Stani Kulechov Founder of Aave Labs	"We want to ensure that we send an extremely strong signal that the value capture is going to the tokencentric model... 100% of that revenue [from Labs products] to the AVA DAO." Historically, value in DeFi protocols was split between the development company (equity) and the DAO (token). Aave Labs is voluntarily forfeiting its revenue streams (including fees from the Aave Card and frontend swaps) to the DAO. This consolidates all economic value into the AAVE token, transforming it from a governance token into a cash-flow generating asset. LONG (Fundamental value accrual shift). The DAO might reject the funding request for Labs ($50M/year), or regulatory scrutiny could increase due to the direct revenue model.	—
TAN /FSLR	LONG	Stani Kulechov Founder of Aave Labs	"The biggest resources for us what we learned is solar power... being able to fund a lot of solar which is capital expensive but operational cost low... tokenize that asset use as a collateral in a V4." Stani explicitly identifies "Abundance Assets"—specifically Solar and Batteries—as the primary target for Aave V4's RWA expansion. He views these as the future of collateral because they require massive upfront capital (which DeFi can provide) but have low maintenance costs. If Aave integrates these assets, it creates a new, massive liquidity tap for the solar industry. LONG (Second-order effect of DeFi RWA adoption). Regulatory hurdles in tokenizing real-world energy assets; technical failure of the RWA "spokes" in Aave V4.	—
TRADITIONAL BANKS /CENTRALIZED LENDERS	AVOID	Stani Kulechov Founder of Aave Labs	"Aave is lending stablecoins at 5%... and a lot of decentralized competitors are lending between 7 to 12%... centralized lending basically collapse[d]." DeFi has proven a superior cost structure (lower rates for borrowers) and superior risk management (automated, transparent liquidations vs. opaque centralized balance sheets). Traditional finance and centralized crypto lenders suffer from higher overhead and human error/fraud risk, making them structurally uncompetitive against optimized smart contracts like Aave V4. AVOID (Technological obsolescence). Regulatory crackdowns on DeFi could force users back to traditional/centralized venues despite the higher costs.	31:13