What Is at Stake in the $51 Million Proposal?
Tensions inside Aave’s governance process have intensified after Aave Chan Initiative (ACI) founder Marc Zeller released what he described as an “audit” of Aave Labs’ past funding and output. The post arrives just before a Snapshot vote on a $51 million proposal that ACI has referred to as the largest funding request in the protocol’s history.
Aave Labs had earlier published its own contributions report, presenting it as a long-term overview of the team’s work since the 2017 EthLend ICO. The report highlighted milestones including the pooled-liquidity model, Flash Loans, the Safety Module, and V3’s Efficiency Mode, arguing these were developed before the DAO’s current service-provider structure was in place.
Zeller challenged that framing. “As the Snapshot for the $51M ‘Aave Will Win’ ask drops tomorrow, take a look at our Audit of Aave Labs’ performance and their ~$86M in funding they’ve received to date,” Aave Chan said in a post on X, linking to the governance report.
In the forum post, Zeller wrote that ACI applied a simple test to Aave Labs: “what did you deliver, what did it cost, and what was the return.” He argued that tokenholders should demand clearer cost-per-outcome analysis and financial transparency before approving fresh funding.
Investor Takeaway
Where Does the $86 Million Figure Come From?
At the center of the dispute is Aave Labs’ cumulative funding. Zeller’s post estimates total capitalization at roughly $86 million, broken down as $16.2 million from the 2017 ICO, $32.5 million from venture rounds, $31.93 million in direct DAO payments, and about $5.5 million in what the post described as “unapproved” swap fees tied to the aave.com front end.
The audit also revisits a long-running disagreement over swap-fee flows, including partner-fee revenue that ACI claims was diverted without a DAO vote. In addition, the post notes that the founding team retained 23% of the original LEND token supply, later converted to AAVE, while current AAVE holdings remain undisclosed.
Zeller argued that despite this funding history, Aave Labs has not published what he called an “accountability report” with wallet transparency or a detailed cost breakdown. That claim is likely to sit at the heart of debate as tokenholders assess the pending request.
Why Is Horizon a Flashpoint?
A large portion of the audit focuses on Horizon, Aave’s real-world asset (RWA) market. Zeller questioned whether headline supply figures reflect underlying usage once incentive farming and idle positions are excluded.
Based on his reading of onchain data, the post places Horizon’s total supply near $466 million, with about 69% in stablecoins and 31% in RWA collateral. It notes that a single asset, USCC, represents most of the RWA side and that three positions account for 59% of pool activity, including a large RLUSD depositor with no borrows and a DirectMinter position tied to idle GHO.
After adjusting for what he considers non-productive deposits, Zeller argued that the “actual” RWA lending base is closer to $135 million, concentrated in a single-issuer collateral structure backing a smaller set of stablecoin borrows.
He also examined Horizon’s economics. The post places cumulative DAO revenue near $216,000, while citing about $4.2 million in Merkl incentives since launch and additional GHO-related costs. Zeller described the result as roughly “$24 spent per $1 earned.”
Investor Takeaway
What Does This Mean for Aave Governance?
The audit also revisits Horizon’s initial governance process, noting that an early proposal included plans for a new token with 15% allocated to the DAO. Zeller wrote that the vote ultimately passed with heavy backing from a single delegation, which he said accounted for 57% of the “FOR” voting power.
That detail feeds into a broader concern about delegation dynamics and voting concentration inside the DAO. As funding proposals grow larger, questions about who influences outcomes — and how transparently financial relationships are disclosed — are becoming harder to separate from protocol development itself.
With the Snapshot vote approaching, tokenholders must decide whether Aave Labs’ historical contributions justify new funding at the requested scale. The outcome will not only determine budget allocation but also set expectations for reporting standards between core contributors and the DAO going forward.
