How Aave Could Help End Crypto Winter, According to Bitwise

Even after 4 months because the large droop from a file worth above $126,000, sentiment surrounding Bitcoin stays fragile. Its failure to bounce again has intensified fears about one other crypto winter.

But Matt Hougan, Chief Investment Officer at Bitwise, believes that decentralized finance might play a central position in main the market out of the present bear part, as buyers more and more deal with fundamentals similar to actual customers, revenues, and sustainable worth.

Aave on the Center

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

Despite 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 strain, notably from the US Securities and Exchange Commission (SEC), which used the Howey take a look at to assess whether or not tokens might be categorised as securities.

The Bitwise exec famous that Aave tried to handle this problem via its “Aavenomics” upgrades in 2024 and 2025, which launched token buybacks funded by protocol charges. But tensions continued as a result of Aave Labs might 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 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, cellular app, card, and institutional companies, immediately 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 group, whereas a brand new basis would maintain the Aave model and emblems.

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

Pushback

The proposal has drawn criticism from some group 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 probably be outlined and managed.

While deeming these issues “respectable,” Hougan stated that Aave’s transfer could lead to different belongings following swimsuit.

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