How Aave Could Help End Crypto Winter, According to Bitwise

Bitwise exec stated that Aave’s governance proposal stands out as a constructive improvement for DeFi throughout the crypto downturn.

Even after 4 months for the reason that huge hunch from a document worth above $126,000, sentiment surrounding Bitcoin stays fragile. Its failure to bounce again has intensified fears about one other crypto winter.

However Matt Hougan, Chief Funding Officer at Bitwise, believes that decentralized finance may play a central position in main the market out of the present bear section, as buyers more and more deal with fundamentals equivalent to actual customers, revenues, and sustainable worth.

Aave on the Heart

In a latest put up, Hougan spoke a couple of governance proposal printed by Aave Labs, the staff behind the Aave lending protocol, titled “Aave Will Win,” for instance of why DeFi could also be getting into a brand new section. In line with Hougan, DeFi protocols like Uniswap and Aave already perform as critical companies. Uniswap, at occasions, handles extra spot buying and selling quantity than Coinbase, whereas Aave generates greater than $100 million yearly in income.

Regardless of this, DeFi-related tokens have underperformed, largely as a result of most had been designed as governance tokens that provide voting rights however no direct declare on protocol revenues. Hougan defined that this construction emerged as a defensive response to regulatory stress, significantly from the US Securities and Alternate Fee (SEC), which used the Howey check to evaluate whether or not tokens may very well be categorised as securities.

The Bitwise exec famous that Aave tried to handle this concern by its “Aavenomics” upgrades in 2024 and 2025, which launched token buybacks funded by protocol charges. However tensions continued as a result of Aave Labs may nonetheless direct some revenues to itself, a degree that drew consideration in December 2025 when it allocated $10 million in swap charges to the corporate.

The brand new “Aave Will Win” proposal seeks to resolve this by committing Aave Labs to route 100% of income from all Aave-branded merchandise, together with its web site, cell app, card, and institutional companies, on to the DAO treasury managed by token holders. In return, Aave Labs would obtain a funding package deal of stablecoins, Aave tokens, and milestone-based grants of round $50 million to cowl improvement of Aave V4 and the switch of mental property to the neighborhood, whereas a brand new basis would maintain the Aave model and emblems.

This may successfully remodel the Aave token from a governance-only position towards an asset with a direct declare on revenues, whereas positioning the founding staff as a service supplier accountable to token holders, Hougan stated.

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Pushback

The proposal has drawn criticism from some neighborhood members who view the funding request as extreme or argue that sure components are bundled collectively. Others additionally level to unresolved questions round how income will likely be outlined and managed.

Whereas deeming these issues “professional,” Hougan stated that Aave’s transfer might lead to different property following go well with.