Aave is currently facing one of the most violent governance crises ever witnessed in DeFi. In less than 48 hours, the AAVE token has dropped over 14%, caught in an internal storm pitting Aave Labs, the company founded by Stani Kulechov, against the Aave DAO, meant to embody the power of token holders. At stake: millions of dollars in revenue, control of the brand, and, more fundamentally, the explosive question of real ownership of a decentralized protocol.
The starting point is technical, but the consequences are political. In early December, Aave Labs announces the integration of CoW Swap on the Aave interface to enhance prices and protection against MEV. A few days later, a delegate publishes an on-chain analysis showing that the fees generated by this integration no longer flow to the DAO’s treasury, but to a private wallet controlled by Aave Labs.
Accusations of “stealth privatization” of DAO
For Marc Zeller, a key figure in governance and head of the Aave Chan Initiative, the situation is clear: the DAO could have lost up to $10 million in annual revenue without a formal vote or validation. He speaks of “stealth privatization“, a disguised privatization of economic flows supposed to return to AAVE holders.
Aave Labs vigorously defends itself. According to Stani Kulechov, this revenue does not fall under the protocol but the frontend, funded, maintained, and secured by Labs. The previous flows redirected to the DAO were, according to him, voluntary contributions, not an acquired right. The protocol belongs to the DAO. The site, the brand, and the infrastructure do not.
This defense has not calmed the anger. On the contrary, it has opened a deep ideological fracture.
Radical proposals that blow up governance
On December 16, the crisis takes a new turn. A first proposal, nicknamed the “poison pill“, demands the seizure of all Aave’s intellectual property, the transformation of Aave Labs into a subsidiary owned by the DAO, and the retroactive recovery of all revenues generated through the brand.
Shortly after, a second proposal, known as the “brand seizure“, calls for the immediate transfer of brands, domain names, social networks, and GitHub repositories to the DAO. Its logic: if the DAO finances development and marketing, it should own the intangible assets.
Then comes the most incendiary element. Aave Labs triggers a Snapshot vote largely echoing this proposition… on behalf of its presumed author, Ernesto Boado, former CTO of Aave Labs. Problem: Boado publicly denies having endorsed this vote. He speaks of a forced move, denounces a breach of trust, and calls on token holders to abstain. Stani emphasizes technical points, and Zeller rebukes him on substance: the war is still ongoing.
Market on alert, historical precedent in sight
The market did not wait for the vote outcome to make a decision. A wave of sales hit AAVE, leading to a sharp drop in price below $160. The probabilities of the vote being accepted, according to Polymarket, fell to around 25%, a sign of profound unease.
Beyond the price, the stake is existential. This crisis goes beyond Aave. It raises a question that the entire DeFi has been avoiding for years: who truly owns a protocol? The deployed on-chain code? The interface used by 90% of users? Or the brand, which holds economic value and symbolic power?
Aave is currently testing, in real-world conditions, the limits of the DAO model against centralized entities essential to its operation. Regardless of the vote outcome, one thing is certain: DeFi cannot ignore this question any longer. The precedent set will be significant.
