According to Bitwise, how Ave helped to end the crypto winter

A Bitwise exec says Aave's management proposal stands out as a positive development for DeFi during the crypto downturn.

Even after four months of falling from a high of over $126,000, sentiment around Bitcoin remains weak. The inability to bounce back has fueled fears of another crypto winter.

But Matt Hougan, chief investment officer at Bitwise, believes that with investors increasingly focusing on basic users such as real users, revenues and sustainable value, decentralized finance can play a central role in getting the market out of the current bear phase.

Ave. in the center

In a recent post, Hugan cited a governance proposal published by Aave Labs, the team behind the Aave lending protocol, titled “Aave Will Win” as an example of why DeFi could be entering a new phase. According to Hugan, DeFi protocols such as Uniswap and Aave operate as serious businesses. Uniswap, at times, handles more spot trading volume than Coinbase, while Ave generates more than $100 million in annual revenue.

Despite this, DeFi-related tokens have underperformed, as most are designed as governance tokens that offer voting rights but no direct claim on protocol revenue. Hugan explained that this structure emerged as a defensive response to regulatory pressure, particularly from the US Securities and Exchange Commission (SEC), which uses the Howey test to assess whether tokens can be classified as securities.

The Bitwise exec attempted to address this problem in 2024 and 2025 with the “Avenomics” update, which introduced token purchases backed by protocol fees. But the tension remains because Aave Labs could still divert some of the revenue to itself, a point that drew attention when it earmarked $10 million in exchange payments for the company in December 2025.

The new “Aave Will Win” proposal seeks to address this by allowing Aave Labs to channel 100% of revenue from all Aave-branded products, including the website, mobile app, card and institutional services, directly into the DAO treasury controlled by token holders. In return, Aave Labs will receive nearly $50 million in Statcoins, Aave tokens and milestone-based funding to fund the development of Aave V4 and transfer intellectual property to the community, while a new foundation will retain the Aave brand and trademarks.

This would move the Aave token from a management-only role to a direct claim to the asset and make the founding team accountable to stakeholders as a service provider, Hugan said.

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get back

The proposal has drawn criticism from some community members who see the funding request as excessive or who argue that certain parties are lumped together. Others point to unresolved questions about how income is defined and regulated.

While he considers those concerns “legitimate,” Hugan said Ave's move could follow other properties.