Unchained Podcast Episode Summary

Episode: Stani Kulechov on Why Aave Labs Is Putting Itself at the Mercy of the DAO
Date: February 18, 2026
Host: Laura Shin
Guest: Stani Kulechov, Founder of Aave Labs

Overview of the Episode

This episode dives deep into the recently published “AAVE Will Win” proposal from Aave Labs. Host Laura Shin is joined by Stani Kulechov to unpack the implications for governance, the relationship between Aave Labs and the DAO, and how the forthcoming AAVE v4 protocol could revolutionize revenue streams and value capture for AAVE token holders. The discussion also touches on the role of foundations in crypto governance, community criticism around revenue and transparency, and the bigger vision for DeFi and real-world assets.

Key Discussion Points and Insights

The “AAVE Will Win” Proposal: Rethinking Value Capture

• Motivation: To resolve controversy stemming from changes in fee flows (e.g., via Paraswap and Cowswap integrations) and clarify value allocation between Aave Labs and the DAO.
• Proposal Core:
  • 100% of application-layer revenues built by Aave Labs to be directed to the AAVE DAO, benefiting AAVE token holders (minus certain deductions like user incentives) ([02:55]).
  • Shifts Aave Labs funding to DAO grants rather than self-sustaining revenue ([09:56]).
  • Proposes a new foundation to manage Aave branding and assets, ensuring legal clarity.
  • Includes ratification of AAVE v4, bringing technical advances enabling expanded revenue models.

Quote:

“We simply give 100% of that revenue to the AAVE DAO for the benefit of the AAVE token holders. And AAVE Labs then becomes a fully token-centric model.”
— Stani Kulechov, [09:12]

Historical Context: Aave Labs, Aave DAO & Revenue Distribution

• Started as a single entity, evolved into a network of service providers with governance handled by DAO ([11:05]).
• Active risk management and protocol upgrades require ongoing, transparent service provider participation.
• Revenue from protocol fees is used to pay service providers and fund growth initiatives.

Quote:

“The way to think about AAVE is in some ways it’s an active protocol... this wide set of transparency... creates a sort of resiliency that you really want from a lending protocol.”
— Stani Kulechov, [12:32]

AAVE v4: Hub-and-Spoke Architecture & Innovation

• V4 introduces:
  • Modular, expandable hub-and-spoke system (centralized liquidity, modular risk isolation, and custom lending strategies) ([15:24]).
  • Reinvestment features to maximize efficiency of on-chain capital ([19:15]).
  • Opens protocol to third-party developer innovation, enabling new DeFi use cases.

Quote:

“A hub is kind of acts as a central bank that is giving credit lines to these sort of commercial banks that then create this lending activity… it allows the AAVE protocol to scale into different risk categories without compromising the main liquidity concentration.”
— Stani Kulechov, [16:53]

DAO Funding Dependency: Putting Labs at the Mercy of Token Holders

• Labs proposes shifting fully to DAO-dependent funding, giving up direct revenue and putting its own budget at the discretion of yearly DAO votes ([27:03]).
• Recognizes the risk and transformation from self-determination to community-driven budget approval.

Quote:

“You are now proposing that there is another entity with a whole set of token holders... that will, you know, basically determine what your budget is every year... that feels like such a big step to me.”
— Laura Shin, [27:03]

Foundation Formation & Legal Structure

• Proposes creating a foundation for Aave’s brand and assets, despite a shift away from foundations by many in crypto ([23:24]).
• Stani advocates for a proven, quick-to-deploy model (foundation) until newer options (like the Wyoming “DUNA” structure) are more battle-tested.

Quote:

“Getting something fast off the ground that is a proven model, the foundation is still the strongest way to do that… How things are in a year or two is different, of course.”
— Stani Kulechov, [25:19]

Addressing Community Criticism

• On revenue transparency:

  • Community (notably Mark Zeller and Multicoin Capital) demands clear, DAO-defined rules around revenue, deductibles, and verifiable reporting ([34:57], [37:16]).
  • Stani is open to implementing clarity and changes based on feedback, views this transparency as a core DAO strength ([37:16]).

• On funding size:

  • $50.7M ask = 31.5% of the DAO treasury, raising concerns ([40:06]).
  • Stani frames the request as comparable to budgets of leading DeFi projects (e.g. Uniswap, Gnosis, Rain) and necessary to compete with fintechs ([40:35]).

• On independence & voting:

  • Plans for foundation independence; foundation must enforce trademarks/brand neutrally and at arm’s length from any ecosystem participant ([45:39]).
  • Regarding grants in AAVE tokens, Kulechov commits that Labs won’t use them to vote ([50:50]).

Vision for the Future: DeFi, Tokenization, and “Abundance Assets”

• Stani’s broader thesis: The real opportunity for DeFi and Aave is in tokenizing future-proof, “abundance” assets (like solar infrastructure), not just existing tradable assets ([53:12]).
• Envisions expanding beyond crypto-native assets to billions in new collateral through tokenized real-world assets, delivering DeFi efficiency at mass scale.

Quote:

“There’s going to be this transition for the next three decades where we can actually create and accelerate this abundance economy by funding these resources. And the biggest resources for us, what we learned, is solar power.”
— Stani Kulechov, [54:47]

Notable Quotes & Memorable Moments

• “We want to ensure that we send an extremely strong signal that the value capture is going to the token centric model.”—Stani Kulechov [0:28], [46:50]
• “AAVE Labs then becomes a sort of fully token centric model. And that removes the uncertainty and also expands the revenue capture surface for the AAVE token.” — Stani Kulechov [09:10]
• “A16z has a lot of bets, you know, but they never bet on AAVE and look what happened.” — Stani Kulechov [24:44]

Timestamps for Key Segments

• [02:55] Stani explains the AAVE Will Win proposal and its implications for protocol/lab value capture
• [09:56] Clarification on 100% revenue commitment to DAO
• [11:05] Background: Evolving relationship between Labs and DAO
• [14:46] V4's architectural advances and why they matter
• [20:32] Status/timelines for AAVE v4 launch
• [23:24] On forming a foundation for Aave brand/assets, rationale vs. newer legal models like DUNA
• [27:03] Labs embracing DAO budget control, historical and psychological context
• [34:57] Community feedback: transparency, revenue reporting, and proposal process
• [40:35] Justifying the $50.7M funding ask
• [45:39] Ensuring foundation independence and brand enforcement
• [50:50] Stani's stance on grant token voting
• [51:51] On bundling vs unbundling the proposal’s components
• [53:12] Stani’s essay: Vision for tokenized abundance assets and DeFi’s expansion

Final Thoughts

This episode stands out for its candid and thorough examination of how DeFi governance and business models may evolve as protocols grow and industries mature. Stani Kulechov’s willingness to put Aave Labs’ fate in the hands of a decentralized, sometimes fractious DAO is notable, and the “AAVE Will Win” proposal is a bold experiment in aligning incentives, community control, and product innovation.

For those in DeFi or interested in protocol governance, this episode offers an invaluable window into the debates and ambitions shaping the future of decentralized finance.