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The Aave DAO Is Collapsing. Is the Token Still a Good Investment?
Aave’s temp check passed, but governance is fracturing. Here’s the bull and bear case for AAVE, and what value capture looks like if the DAO stops working.
Juan Aranovich
March 07, 2026 • Estimated Reading Time: 2 minutes
This week Aave governance advanced a framework proposal called “Aave Will Win” by passing a temperature check, which is an early, non-binding signal vote that precedes a formal onchain proposal. The vote passed narrowly: 52.58% in favor, 42% against, and 5.42% abstain, with about 622,300 votes on the yes side.
At a high level, the framework is trying to resolve an awkward reality: crypto’s biggest DeFi borrow/lend protocol is governed by a DAO, but much of the user-facing product layer has been built and operated by the centralized company, Aave Labs. “Aave Will Win” proposes routing 100% of revenue from Labs-run products back to the DAO treasury (net of partner payouts), formally positioning Aave v4 as the long-term technical foundation, and pairing that with a major funding request of $25 million in stablecoins plus 75,000 AAVE.
The problem is that this vote is landing in the middle of a governance credibility crisis. A dispute over interface fees and control escalated into broader accusations that Labs-linked voting power can effectively decide outcomes, and key groups have announced plans to step back this spring and summer.
As Taylor Monahan put it on Uneasy Money: “What the heck is the AAVE token going to be useful for moving forward?”
In the rest of this article, we’ll cover:
Whether AAVE is actually a good investment after the DAO drama, not just a “big DeFi name”
The bull case and the bear case, and what has to happen for each to be true
Real value capture: fees, buybacks, treasury flows, and what is real versus aspirational
Whether Aave can defend its moat if key builders and governance stewards keep leaving
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