Aave Labs Sends Revenue to DAO, Seeks $50M Funding

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Aave is proposing one of the most consequential governance shifts in DeFi, offering to route 100% of protocol revenue to the DAO in exchange for structured funding worth roughly $50M.

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In Today's Email:

• What Matters: Aave Labs Sends Revenue to DAO, Seeks $50M Funding 👻 

• Founders Highlight: Kyle Samani of Forward Industries 👨 

• Deal Flows: Birch Hill Raises $2.5M for Institutional Onchain Credit 💰️ 

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WHAT MATTERS

Aave Labs Sends Revenue to DAO, Seeks $50M Funding

State of play: Aave Labs has proposed sending 100% of revenue from Aave branded products to the Aave DAO treasury, including swap fees from V3 and V4, frontend earnings, and future products like Aave Card and a potential AAVE ETF.

• It also plans to move trademarks and intellectual property into a new Aave Foundation.

• In return, Aave Labs is asking for $25M in stablecoins, 75,000 AAVE over two years, and several $5M grants for new launches.

• Annual budgets would still require DAO approval.

The move follows months of tension between Aave Labs and the DAO over ownership, revenue control, and governance authority. The conflict intensified after Labs redirected frontend swap fees away from the DAO treasury last year.

• Critics, including Marc Zeller from the Aave Chan Initiative, argue the proposal is effectively a $50M extraction attempt framed as decentralization.

• Supporters see it as a structural reset that formalizes DAO control while keeping Labs funded as a core development arm.

• The proposal also centers around the long awaited Aave V4 upgrade, which is expected to unlock new revenue streams through a hub and spoke architecture.

• V3 could gradually wind down after V4 launches.

Why it matters: The debate is about power and incentives. Is Labs truly surrendering control to token holders, or restructuring its funding model while maintaining influence? The DAO will ultimately decide.

Our take: This is a restructuring of incentives, not pure decentralization. Labs swaps recurring revenue for DAO funded operations, shifting power on paper while securing long term budget commitments.

For builders and investors: Focus on revenue growth and governance discipline. If funding is milestone driven and V4 unlocks new streams, token value accrues to the DAO. If not, governance risk becomes the dominant overhang.

BUILDER-INVESTOR HIGHLIGHT

Kyle Samani of Forward Industries

Intro: Kyle Samani is the Chairman of Forward Industries, the largest Solana treasury company.

Previous background: Kyle co-founded and served as Managing Partner at Multicoin Capital from 2017 to early 2026. Under his leadership, Multicoin became one of the most prominent crypto native funds, backing major infrastructure and protocol projects.

• Before Multicoin, Kyle was Co founder and CEO of Pristine, a healthcare technology company based in Austin.

• Earlier in his career, he worked as a Technical Sales Manager at VersaSuite.

• He holds a Bachelor of Science in Finance and Management from NYU Stern School of Business.

The big idea: Kyle’s big idea is that crypto becomes core financial infrastructure, not just a speculative asset class. He believes blockchain networks will rewire how capital moves, settles, and is owned, similar to how the internet rewired information.

Take a peek at our referral reward at the bottom of this issue. Share this newsletter and receive our list of 500 crypto VC individuals 👇

INSIGHTS

WLFI Launches FX Remittance Push

World Liberty Financial, a Trump linked crypto venture, plans to launch World Swap, a foreign exchange and remittance platform aimed at cutting cross border transfer fees.

• The service will connect users directly to debit cards and bank accounts and compete with traditional FX intermediaries by offering lower cost settlement.

• Its recently launched World Liberty Markets platform, built around the USD1 stablecoin, reportedly generated $320M in lending activity within four weeks.

• Reports of foreign investment ties, including a UAE stake, have triggered congressional attention and ethics concerns.

• The White House has denied any conflicts of interest.

• Strategically, the remittance push positions WLFI in a $7T global FX market, adding a new revenue vertical.

DEAL FLOWS

Birch Hill Raises $2.5M for Institutional Onchain Credit

Deal flows slowed down this week - we saw $18M+ in deals 💼 

Birch Hill has raised $2.5M in a pre seed SAFE round co led by ParaFi Capital and Castle Island Ventures to build institutional grade infrastructure for onchain credit and tokenized asset markets.

• The firm is launching its first lending vaults on Morpho and plans to expand to other protocols such as Euler.

• Its strategy focuses on capital preservation, conservative loan to value ratios, and real time collateral monitoring rather than yield aggregation.

• Birch Hill’s edge is its Collateral Risk Framework, which monitors liquidity, oracle integrity, and market risk with institutional grade governance and reporting.

• The team brings experience from Goldman Sachs, Cerberus, BlackRock’s Aladdin platform, and digital asset research.

• The firm is targeting asset managers and funds seeking compliant, auditable onchain credit exposure, while evaluating US regulatory registration.

Deal flows in the past week:

• Xross Road, $1.5M Pre Seed Round

• Birch Hill Holdings, $2.5M Pre Seed Round

• Levl, $7M Seed Round

• Bullshot, $7.5M Private Round

• Zoth, Unknown $ Strategic Round

• Uniswap, Unknown $ Unknown Round

• edgeX, Unknown $ Unknown Round

• LayerZero, Unknown $ Unknown Round

QUICK BITES

• SEC Chair Atkins calls prediction markets a 'huge issue.'

• Binance finalizes $1B SAFU reserve conversion into BTC.

• Coinbase swings to $667M loss as crypto slump drags Q4 revenue.

• Banking lobby urges OCC to address risks around crypto firm charters.

• CFTC Chair appoints crypto heavyweights to innovation advisory panel.

• World Liberty Financial to roll out foreign exchange remittance service.

• Aave Labs proposes sending 100% of protocol revenue to DAO, seeks funding.

NOTEWORTHY READS & MEME

• Stacy’s read on Why AI Agents Need Crypto.

• Raoul Pal’s read on Crashes, Manias and Panic's.

• Plur Daddy’s read on There's Not Enough Money In The World.

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Disclaimer: All the information presented in this publication and its affiliates is strictly for educational purposes only. It should not be construed or taken as financial, legal, investment, or any other form of advice.