Founder of Aave Ecosystem Organization: Aave Labs spent $86 million over eight years, with all six products failing.

Aave Ecosystem Contributor Organization ACI Founder Marc Zeller Releases Public Report Revealing that since 2017, Aave Labs has received approximately $86 million in capital support. However, aside from the core lending protocol, all six independent products launched have failed or not achieved profitability, including the high-profile RWA project Horizon, with a return on investment ratio of up to 24:1.
(Background: Bitwise CIO: DeFi can lead crypto out of winter, Aave earns over 100 million annually! Michael Saylor also admits “Crypto Winter”)
(Additional context: Aave surpasses Klarna, approaches brokerages in DEX! First traditional finance vs. DeFi comparison report released)

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• Eight years, $86 million
• Six products all dead
• Horizon tokenized project TVL “flooded?”
• Core development team has long since left

When a DeFi protocol’s annual revenue exceeds $100 million, the community begins to ask, “Where did the money go?” Aave is facing this awkward question. Marc Zeller’s recent detailed report exposes the flow of funds and product performance over the past eight years, but the numbers are quite uncomfortable.

Eight years, $86 million

The report states that since 2017, Aave Labs has accumulated about $86 million in capital support, sourced from three main channels:

• 2017 ICO: The founding team retained 23% of LEND tokens (later migrated 100:1 to AAVE), which had significant value at AAVE’s peak price
• VC Funding: Multiple rounds of venture capital injected early-stage funds
• DAO Direct Grants: About $37.4 million from the Aave DAO treasury

Notably, before receiving DAO funds, Labs already had a capital base of approximately $48.7 million. In other words, Labs was not a “zero-start, community-funded” team but a well-funded entity that continued to ask the DAO for more funds. Currently, Labs is applying for an additional $51 million through the “Aave Will Win” proposal.

Six products all dead

The most damaging part of the report is the assessment of Labs’ product line performance. Zeller points out that besides the core lending protocol itself, the six independent products launched over the years have all failed or not achieved sustainable profitability.

This means that the DAO’s ongoing funding support is not for an “innovation engine,” but more like a team that, apart from maintaining the core protocol, has yet to prove it can create independent value. For an organization that has received a total of $86 million, such a product track record is clearly failing.

Horizon tokenized project TVL “flooded?”

The report’s analysis of the RWA (Real World Assets) project Horizon under Labs is particularly sharp. Horizon once claimed to surpass $1 billion in scale, but Zeller revealed that the actual RWA collateral is only about $135 million, heavily concentrated in a single asset. This not only contradicts public claims but also poses concentration risk.

More critically, the ROI is concerning. Since launching in August 2025, Horizon has generated about $216,000 in total revenue for the DAO, while incentives and related costs have reached approximately $5.25 million, resulting in a ROI of about 24:1. In other words, for every $24 invested, the DAO only earns $1.

Core development team has long since left

The report also reveals an often-overlooked fact: key developers of Aave V1, V2, and early V3.0 left Labs gradually between 2021 and 2022. V3.0 was considered the last major protocol version led by Labs; subsequent updates have been driven mainly by DAO service providers.

This raises a fundamental question: if core protocol development is no longer led by Labs, then why does the DAO continue to allocate funds to Labs? How much of each funding actually flows back into technical improvements of the protocol?

Further, the report points out that a single large address in governance voting played a crucial role in passing Horizon proposals. This effectively concentrates DAO fund allocation decisions in the hands of a few whales, revealing a high degree of centralization under the guise of “decentralized governance.”

These controversies come at a time when a new $17.5 million product growth proposal is under review. Discussions within the Aave community around fund allocation, performance disclosure, and governance transparency are intensifying. This report provides the community with data-driven ammunition, but the subsequent response will likely be criticism—and perhaps more questions. We can only wait and see.

For the Aave protocol, the real test is not whether it can continue to generate profits—its profitability is unquestioned—but whether the DAO can establish effective accountability mechanisms to ensure every dollar spent is justified.