Will "Aave Will Win" help Aave become the "JPMorgan Chase" of the blockchain?

Author: Jonah Burian; Translator: AdidiaoJP, Foresight News

The "Aave Will Win" proposal includes a request for the Aave DAO to approve Aave V4 as the core technology foundation for the protocol's future development, and a proposal to directly inject the proceeds of all Aave-branded products into the DAO treasury to establish a framework for DAO strategic growth and development funding. Furthermore, it includes solutions for protecting the Aave brand.

Aave is no longer an experimental protocol. With billions of dollars in total value locked and approximately 60% of the active lending market share in the decentralized lending space, the Aave protocol ranks among the world's top banks by deposit size. It generates over $100 million in revenue annually and processed a record $180 million in liquidations without human intervention during one of the largest deleveraging events in cryptocurrency history.

Aave is no longer an experimental protocol. With billions of dollars in total value locked and approximately 60% of the active lending market share in the decentralized lending space, the Aave protocol has become one of the world's top banks by deposit size.

DAOs are still struggling to build applications

DAOs are encountering obstacles here. Building competitive products requires speed, taste, and the ability to make tough decisions without committee approval. This means hiring a large number of people, iterating based on market feedback, and deploying capital to drive growth outside of governance cycles. Fintech companies entering the DeFi space (Revolut, Robinhood, Stripe, etc.) are well-funded and act quickly. They don't make product decisions through token holder voting.

Aave DAOs excel in their areas of expertise: risk parameters, treasury management, protocol upgrades, and stakeholder coordination. But asking a DAO to hire a growth director, price enterprise transactions, or decide whether to subsidize user acquisition is asking it to do things it's not good at. This governance burden is a serious disadvantage when you're competing with startups that can launch in a week.

So, I think the issue isn't whether Aave needs a team capable of building apps at startup speed and autonomy. I think it clearly does; the issue is how to design the architecture without undermining the decentralization that makes Aave successful. The Proposal's Role By directing all revenue from Aave-branded products to the DAO, the proposal puts all participants under the same economic umbrella. Every dollar generated by Labs through Aave-branded products (apps, cards, Pro, Kit, Horizon, etc.) goes into the DAO treasury. Labs retains control over how it's built and released. There's no need for governance votes to decide hiring, user acquisition, or which markets to enter. This is how you compete with fintech companies. Importantly, Labs operates within the mandate provided by the DAO. If they fail to deliver, the funding stops. What excites me most is what this means beyond Aave Labs. This framework isn't exclusive to a single team; it creates a model where any company can build within the DAO, channeling product revenue to a treasury in exchange for funding authorization and operational autonomy. DAO governance, coupled with multiple competing teams building applications under the same economic roof, could be how you build an on-chain financial institution that can compete with the world's largest banks. Investment Disclosure: I am an investor in @blockchaincap, a venture capital firm with a large, long-term AAVE position. The views expressed in this article are solely my own and do not necessarily reflect the views of Blockchain Capital or any of its affiliates.