A significant governance dispute within the Aave ecosystem has exposed deep tensions between Aave Labs and its decentralized autonomous organization (DAO) regarding token value capture, operational control, and revenue transparency. The controversy centers on a failed proposal to transfer control of Aave's brand and front-end assets—including domains, social media handles, and trademarks—directly to the DAO.
The catalyst for the proposal was an allegation from pseudonymous DAO member EzR3aL, who claimed that fees generated from Aave's integration with decentralized exchange aggregator CoW Swap were being routed to a wallet controlled by Aave Labs instead of accruing directly to the DAO treasury. This sparked a broader debate about economic alignment and who should benefit from protocol-generated revenue.
The DAO vote, which concluded in late December, saw the proposal overwhelmingly rejected. Snapshot data revealed that 55.29% of voting power opposed the measure, 41.21% abstained, and only 3.5% voted in favor. The outcome followed intense public debate across governance forums and social media.
Amid the controversy, Aave founder and CEO Stani Kulechov disclosed that the Aave DAO generated a record $140 million in revenue during 2025, a figure he stated exceeded the combined revenue of the previous three years. He emphasized that AAVE token holders control the treasury holding these funds.
Kulechov addressed the governance tensions, acknowledging communication shortcomings and pledging future disclosures to better articulate how Aave Labs' products generate value for the DAO. He also faced scrutiny over a $15 million personal purchase of AAVE tokens made shortly before the vote closed, with critics questioning the timing. Kulechov firmly denied using these tokens to influence the governance process, stating they were not used for voting and were instead a show of conviction in the project. On-chain data indicated the tokens were acquired at an average price near $176.
Wintermute CEO Evgeny Gaevoy, whose firm voted against the proposal, provided critical commentary. He described the proposal as "premature and lacking critical details," arguing it made no sense to commit to a course of action without knowing specifics about governance, profit motives, or guaranteed value accrual to token holders. Gaevoy identified value accrual as the "heart of the problem" and nudged Aave Labs to present a clearer plan.
Further governance concerns were highlighted by voting power concentration, with data showing the top three voters controlled over 58% of the total power. Former Aave Labs CTO Ernesto Boado also stated the proposal advanced without his approval.
Looking forward, Kulechov stressed that the Aave ecosystem is large enough to support multiple service providers and committed to improving transparency. He concluded with a message of confidence, stating, "$AAVE will win," signaling a belief that the protocol can emerge stronger from the dispute.
