How Aave can help end the Crypto Winter, according to Bitwise

Bitwise exec said Aave’s governance proposal stands out as a positive development for DeFi during the crypto crisis.

Even after four months since its massive drop from a record price above $126,000, sentiment around Bitcoin remains fragile. The inability to bounce back has increased fears of another crypto winter.

But Matt Hougan, Chief Investment Officer at Bitwise, believes decentralized finance could play a central role in leading the market out of its current bear phase as investors increasingly focus on fundamentals like real users, revenue and sustainable value.

Aave in the Center

In a recent post, Hougan spoke about a governance proposal published by Aave Labs, the team behind the Aave lending protocol, titled ‘Aave Will Win’, as an example of why DeFi may be entering a new phase. According to Hougan, DeFi protocols such as Uniswap and Aave are already functioning as serious businesses. Uniswap sometimes handles more spot trading volumes than Coinbase, while Aave generates more than $100 million in revenue annually.

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

The Bitwise executive noted that Aave tried to address this issue through its “Aavenomics” upgrades in 2024 and 2025, which introduced token buybacks funded by protocol fees. But tensions continued as Aave Labs was still able to direct some of the revenue to itself, a point that drew attention in December 2025 when it allocated $10 million in swap fees to the company.

The new ‘Aave Will Win’ proposal attempts to solve this by requiring Aave Labs to send 100% of revenue from all Aave-branded products, including the website, mobile app, card and institutional services, directly to the DAO treasury controlled by token holders. In return, Aave Labs would receive a funding package of stablecoins, Aave tokens, and milestone-based grants of approximately $50 million to cover the development of Aave V4 and the transfer of intellectual property to the community, while a new foundation would own the Aave brand and trademarks.

This would effectively transform the Aave token from a governance-only role towards an asset with a direct claim on revenue, while positioning the founding team as a service provider accountable to token holders, Hougan said.

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Recoil

The proposal has drawn criticism from some community members who view the funding request as excessive or argue that certain elements have been bundled together. Others also point to unresolved questions about how revenue will be defined and monitored.

While he deemed these concerns “legitimate,” Hougan said Aave’s move could lead other assets to follow suit.