Aave v3 WETH Project Update

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Biggest Stories of 2025

• Add WETH to the wrsETH wstETH E-Mode (424): The Aave community approved a proposal to extend utility for wrsETH on the Aave V3 Base market by adding WETH borrowing to the existing wrsETH/wstETH E-Mode category. (December 24, 2025) 9
• Aave Founder Buys 84K AAVE Amid 'Civil War': Founder Stani Kulechov purchased 84,033 AAVE tokens for approximately $12.6 million amid a major governance dispute between Aave Labs and the Aave DAO over swap fees flowing to Aave Labs wallets instead of the DAO treasury. (December 23, 2025) 10
• Aave Founder Calls Token Alignment Proposal 'Bad for Aave': Kulechov declared Aave Labs would vote "no" on BGD Labs' tokenholder alignment proposal, deeming it bad for the protocol, the DAO, and AAVE token holders, while GHO reached an all-time high market capitalization of $483 million. (December 23, 2025) 11
• Aave Falls 18% Over Week Amid Dispute: The AAVE token fell approximately 18% over seven days, the worst performer among the top 100 cryptocurrencies, attributed to the internal governance dispute over control of the protocol's brand, domains, and public channels. (December 23, 2025) 12
• X Layer Network aDI Path Activation (422): The Aave DAO approved a proposal to register pre-deployed XLayer adapters on a.DI, required for an activation vote of Aave v3 XLayer. (December 22, 2025) 13
• Aave 2026 Master Plan: Founder Stani Kulechov published the Aave roadmap for 2026, outlining strategy to scale the protocol into a "foundational credit layer for the onchain economy" around three initiatives: Aave V4, Horizon expansion, and the Aave App rollout. (December 16, 2025) 14
• After SEC Relief, Aave Confronts Governance Question: The U.S. SEC formally closed its four-year investigation into the protocol without recommending enforcement, while a new governance proposal sought to transfer ownership of the Aave brand, domains, and social channels to AAVE token holders via a DAO-controlled entity. (December 16, 2025) 15
• Aave DAO Controversy Rekindles Tokenholder Rights Debate: A governance dispute erupted between Aave DAO and Aave Labs over approximately $200,000 per week in fees redirected to Aave Labs following a CowSwap integration, prompting a multi-phase token alignment proposal to grant tokenholders control over brand assets. (December 16, 2025) 16
• Aave Snubs Sky's USDS as Collateral: Aave governance passed a vote (99.5% approval) to remove Sky's USDS stablecoin as collateral, citing negligible revenue and asymmetric risks, while a separate vote suggested winding down v3 instances on zkSync, Metis, and Soneium. (December 4, 2025) 17
• Aave DAO Mulls Pulling Back 'Multichain Strategy': The Aave DAO discussed a strategic pullback from maximalist multichain expansion, with the Aave Chan Initiative proposing to roll back v3 instances on zkSync, Metis, and Soneium and imposing a $2 million annual revenue floor for future deployments. (December 3, 2025) 18
• Upgrade Aave Instances to v3.5 (353): The Aave DAO approved the proposal to upgrade protocol instances from version 3.4 to 3.5, modifying Pool, AToken, and VariableDebtToken contract implementations across all supported networks. (August 6, 2025) 3
• Aave v3.5 Goes Live: The v3.5 upgrade proposal was executed and became live. (August 7, 2025) 5
• July 2025 Funding Update (349): The Aave DAO approved operational and financial actions for July 2025, including bridging remaining assets from Arbitrum and Polygon to Ethereum, extending the EURe incentive campaign, and setting allowances for six weeks of AAVE buybacks. (August 2, 2025) 19
• Upgrade Aave Instances to v3.5 (353) Proposed: BGD Labs shared an AIP to upgrade Aave v3 deployments to v3.5, focused on mathematical improvements to the accounting layer including directional rounding and enhanced flags handling. (July 21, 2025) 4
• Upgrade Aave Instances to v3.4 (334) Executed: Onchain voting on the v3.4 upgrade proposal ended, passed, and was scheduled for execution on July 3, 2025. (July 2, 2025) 6
• Upgrade Aave Instances to v3.4 (334) Split: BGD Labs disclosed it would split the original v3.4 upgrade into v3.4 and v3.5, moving the math precision component and logic library improvements to v3.5, with separate audit cycles for each. (June 12, 2025) 7
• May Funding Update (304): The Aave DAO approved funding for May operational needs, including bridging assets to Ethereum, consolidating funds (swapping USDT, USDC, DAI, LUSD, CVX, and FRAX), depositing 115 ETH into Aave v3 Core, and creating allowances for buybacks. (May 5, 2025) 20
• Removal of Legacy VotingPortals from Governance v3 (291): Voting ended and the proposal passed with 100% of votes in favor, removing deprecated VotingPortals following implementation of new VotingPortal contracts. (April 14, 2025) 21
• Removal of Legacy VotingPortals from Governance v3 (291) Proposed: Onchain voting started on a proposal to remove deprecated VotingPortals from Aave Governance following the implementation of new VotingPortal contracts from Proposal 273. (April 11, 2025) 22
• Upgrade Aave Instances to v3.4 (334) Snapshot: Snapshot voting started on the v3.4 upgrade ARFC. (April 2, 2025) 23
• Gov v3 VotingMachine / VotingPortal Maintenance (272 & 273) Completed: Voting ended and the proposal passed with 100% of votes in favor. (March 27, 2025) 24
• Aave Finance Steward Modules Deployment Proposed: Voting started on a proposal to approve the initial configuration of the Aave Finance Steward, a set of smart modules enabling approved signers to perform DAO-approved actions. (March 24, 2025) 8
• Gov v3 VotingMachine / VotingPortal Maintenance (272 & 273) Resubmitted: Onchain voting started on a resubmission of the proposal. (March 24, 2025) 25
• Gov v3 VotingMachine / VotingPortal Maintenance (272 & 273) Proposed: Onchain voting started on a proposal to make maintenance updates to the Governance v3 VotingMachine smart contracts, including deploying new DataWarehouse, VotingStrategy, and VotingPortal contracts. (March 20, 2025) 26
• Collector Upgrade (237 and 239): Onchain voting started on a proposal to upgrade the Aave Collector across all networks to allow multiple funds admins. (January 29, 2025) 27