Aave, the leading decentralized finance (DeFi) lending protocol, has surpassed $1 trillion in cumulative lending volume since its inception, solidifying its position as the backbone of onchain credit markets with $27.2 billion in total value locked and $83.3 million in fees generated over the past 30 days.
The milestone comes amid intensifying governance tensions as Aave Labs seeks $51 million in new funding through the “Aave Will Win” proposal, facing sharp scrutiny from ecosystem contributor Aave Chan Initiative (ACI) over past financial performance and transparency.
Historic Lending Milestone and Market Position
Aave has achieved a historic milestone in DeFi, with cumulative lending volume exceeding $1 trillion since its launch. The protocol currently secures over $27.2 billion in total value locked (TVL), enabling users to earn interest on deposits and borrow instantly using crypto as collateral.
Over the past 30 days, Aave has generated more than $83.3 million in fees, nearly four times that of its closest competitor, Morpho, and significantly ahead of other lending platforms including JustLend, SparkLend, Maple, and Compound Finance, each holding over $1 billion in TVL.
Stani Kulechov, CEO of Aave Labs, celebrated the achievement, stating that Aave now stands as “the backbone of onchain lending, powering a new financial system that is open, global, and unstoppable.” He emphasized the protocol’s goal of becoming the “largest, most efficient liquidity network in the world” that builders, banks, and fintechs integrate by default.
The lending volume milestone reflects frequent liquidity reuse through features like flash loans, multi-chain expansion, and efficient borrowing tools, enabling the same capital pools to power repeated trading, arbitrage, and liquidation activities across the ecosystem.
Institutional Expansion: Aave Horizon Launch
In August 2025, Aave Labs launched Aave Horizon, a new lending market on Ethereum designed specifically for traditional finance firms and institutional investors to borrow stablecoins against real-world assets (RWA). Major asset managers including VanEck, WisdomTree, and Securitize were among the first participants in the institutional offering.
However, the Horizon project has become a focal point of controversy. While initially claiming to have surpassed $1 billion in scale, ACI founder Marc Zeller’s analysis indicates that actual RWA collateral stands at approximately $135 million, highly concentrated in a single asset (USCC). Since its August 2025 launch, Horizon has generated approximately $216,000 in cumulative revenue for the DAO, while incentive and related costs amount to roughly $5.25 million, yielding an input-output ratio of approximately 24:1—$24 spent for every $1 earned.
Governance Dispute: ACI Publishes Critical Audit of Aave Labs
On February 24, 2026, Aave Chan Initiative (ACI) founder Marc Zeller published a comprehensive public report scrutinizing Aave Labs’ financial history and product performance ahead of a vote on the “Aave Will Win” proposal, which seeks approximately $51 million in new funding.
According to the report, Aave Labs has received approximately $86 million in cumulative capital support since 2017, including:
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$16.2 million from the 2017 ICO
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$32.5 million from venture capital rounds
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$31.93 million in direct DAO payments
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Approximately $5.5 million in what Zeller characterized as “unapproved” swap fee revenue
The founding team retained 23% of the original LEND token supply during the 2017 ICO, later migrated to AAVE at a 100:1 ratio, with current AAVE holdings remaining undisclosed.
The report critically questioned Labs’ past product performance, stating that six independent products launched in addition to the core protocol have either failed or not achieved profitability. Beyond Horizon, Zeller argued that early core development members of Aave V1, V2, and V3.0 had left Labs between 2021 and 2022, with V3.0 being the last major protocol version led by Labs. Subsequent versions have been primarily driven by DAO service providers including BGD, Chaos, TokenLogic, and ACI.
Zeller also raised concerns about governance mechanics, noting that a single large delegation address played a key role in approving the Horizon proposal, accounting for 57% of “FOR” voting power, sparking community discussions about governance centralization and fund utilization efficiency.
Aave Labs Response and Revenue Commitment
In response to the governance pressure, Aave Labs has committed to routing 100% of all revenue from Aave-branded products to the Aave DAO treasury under a DAO-funded operating model. The “Aave Will Win” proposal includes a request for $42.5 million in stablecoins and 75,000 AAVE tokens, with developers pledging to direct all branded product revenue to the DAO and develop Aave V4 as the unified technical foundation.
Labs defended its track record, emphasizing its role in creating versions V1, V2, and V3, as well as key monetization protocols like flash loans. The team argued that meaningful contributions to code, security, and infrastructure cannot be measured by forum posts or superficial metrics.
The proposal has divided the community. Some members expressed concern over the size of the requested amount, noting that transferring 75,000 AAVE tokens also transfers voting rights within the project—potentially consolidating governance power without public disclosure of total holdings.
Escalating Tensions and BGD Exit
The governance dispute has intensified with the announcement that BGD Labs, one of Aave’s key technical developers, will cease cooperation with the project effective April 1, 2026, citing “radical changes” in the DAO’s structure. This exit raises concerns about V3 maintenance and V4 validation risks moving forward.
On February 26, 2026, Aave DAO members are scheduled to hold a preliminary vote on the “Aave Will Win” proposal. Critics, including prominent community member post rich, expressed frustration on social media: “after 5 years of being an aave holder, I think I’m done. I can’t stand how obnoxious things have gotten. make a rash proposal, community in clear disagreement, control a large voting stake, win the vote regardless.”
FAQ: Understanding Aave’s Milestone and Governance Dispute
Q: What does Aave surpassing $1 trillion in cumulative lending signify?
A: The $1 trillion milestone represents the total value of all loans originated through Aave since its 2017 launch, demonstrating sustained demand for onchain credit. This volume is enabled by frequent liquidity reuse through features like flash loans and multi-chain expansion, allowing the same capital pools to power repeated transactions across the ecosystem.
Q: What is the “Aave Will Win” proposal and why is it controversial?
A: The proposal requests approximately $51 million in funding ($42.5 million in stablecoins plus 75,000 AAVE tokens) for Aave Labs to continue development, including Aave V4. Critics, led by ACI founder Marc Zeller, argue Labs has already received $86 million historically while six of its independent products failed or lost money, citing Horizon’s 24:1 spending-to-revenue ratio as evidence of poor capital efficiency.
Q: How does the Horizon project illustrate the governance concerns?
A: Horizon, Aave’s institutional RWA lending market, claimed over $1 billion in scale but actually holds approximately $135 million in RWA collateral concentrated in a single asset. It has generated $216,000 in DAO revenue against $5.25 million in costs, sparking questions about resource allocation and whether promotional metrics mask underlying performance.
Q: What are the next steps in Aave’s governance process?
A: The Aave DAO will hold a preliminary “Snapshots” vote on February 26, 2026, for the “Aave Will Win” proposal. If approved, it would proceed to an onchain vote. ACI has called for splitting the proposal into separate votes, mandating wallet disclosure, and establishing third-party audits before approving additional funding. The impending exit of key developer BGD Labs on April 1 adds urgency to resolving governance tensions.
