Even after four months since the massive slump from a record price above $126,000, sentiment surrounding Bitcoin remains fragile. Its failure to bounce back has intensified fears about another crypto winter.

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

Aave at 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 like Uniswap and Aave already function as serious businesses. Uniswap, at times, handles more spot trading volume than Coinbase, while Aave generates more than $100 million annually in revenue.

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

The Bitwise exec noted that Aave attempted to address this issue through its “Aavenomics” upgrades in 2024 and 2025, which introduced token buybacks funded by protocol fees. But tensions continued because Aave Labs could still direct some revenues 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 seeks to resolve this by committing Aave Labs to route 100% of revenue from all Aave-branded products, including its 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 around $50 million to cover development of Aave V4 and the transfer of intellectual property to the community, while a new foundation would hold the Aave brand and trademarks.

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

Pushback

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

While deeming those concerns “legitimate,” Hougan said that Aave’s move may result in other assets following suit.

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