[ARFC] $AAVE token alignment. Phase 1 - Ownership

Governance
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Let me restate a very simple question. A clear, concrete answer would address many of the concerns raised in this thread, and I invite the community to insist on clarity here.

Assume the following end state:

  • The DAO owns the brand assets (domains, handles, naming rights, trademark) via a DAO-controlled vehicle.
  • Avara receives a broad license and delegated mandate to operate them day to day, with clear scope, security standards, and enforceable terms.

Under that assumption, name one specific capability Avara would lose compared to the status quo.

Please answer with one sentence and one example. Please specify the exact action you believe would become impossible.

To refocus the debate, this proposal is phase one.

Phase one establishes a clear mandate from $AAVE token holders for the DAO to seek transfer of ownership of strategic assets.

Phase two defines the terms and executes the actual transfer. That is where all parties sit at the same table to agree on fair, enforceable terms for stewardship and monetization.

Phase two cannot happen without phase one, because without an explicit mandate, the DAO has no authority or leverage to bring the current holder to the table and negotiate from a position of legitimacy.

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Emilio VP of engineering of Avara: “If this proposal passes labs is out of the dao in less than a trimester and V4 goes down the toilet. You neither have the background knowledge nor the experience to truly understand what’s going on, no offence”

Source: https://x.com/the3d_/status/2002003852271255784

Aave Labs’ threat to abandon the DAO if ownership transfers is either incredibly suspicious or incredibly stupid. What leverage do they think this gives them?
Context matters: they’ve already attempted to launch a competing token (Horizon). There’s no operational reason DAO ownership would harm development—Labs could still build, just accountable to token holders instead of Avara equity.

The threat reveals the real issue isn’t effectiveness, it’s control.

What are they hiding? I’m done with all the gaslighting. Whoever wants to see, will see.

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It’s all about the DAO, for the DAO, by the DAO. Yet some AAVE Labs employees seem unwilling (or uninterested lol) in understanding this.

Instead, all they do is shout “Marc Zeller is a dictator! The ACI is trying to take control of everything!” across Twitter and this forum :clown_face:

FOR THE DAO, BY THE DAO. Not for Marc Zeller, by ACI. Goddammit. How hard is this to grasp? :sweat_smile:

Does anyone else notice that some of the FUD tactics AAVE Labs is using now are pretty similar to those our competitors have been using for years in order to undermine the AAVE DAO and grab market share?

At this point, it almost feels like borderline treason

Right now, the discussion just feels soooooooooo frustratingly one-sided… and it’s honestly getting quite exhausting

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We’re really looking forward to reading a simple and straight-forward answer to this question.

Further comments missing this target can simply be considered as narrative manipulation tactics and misinformation attempts.

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Hello all! Diving deeper into the conversation, I wanted to know the positioning of other large delegates who are not engaging in it.

Having a look at the last snapshot vote, those are the ones with the most VP.

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Can @TokenLogic share their view on this and how they stand, especially given their dual role as Service Provider to the DAO and a large delegate?

And the other @Orbit-Delegate too?

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You bought into $AAVE with Aave Labs having the management of the assets under debate. If you feel differently now, then sell. You are entitled to your frustration, but it doesn’t add value to the debate. The counter argument is as valid.

This is a false simplification of what “ownership” actually means in real-world operational, legal, and strategic contexts. Even if Aave Labs remains responsible for operations under a mandate, they loose accauntability as it gets shifted to the DAO. It is easy to imagine this raising concerns on a third-party shaping a deal in terms of enforceability, ambiguity of IP guarantees and delays in legal reviews.

Also, no mandate can be 100% exhaustive. I don’t want to see an scenario where decision making is impaired in Aave Labs due to unclear scope, or the risk of each action being interpreted as “out of mandate” after the fact.

Avara losing ownership means gaining ambiguity, legal risk, and dependence on DAO governance for decisions that are often urgent, creative, or strategically sensitive.

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@Frida If you are an Avara employee, feel free to disclose it and the appropriate tag can be applied to your account.

If you are not, the question is directed to @stani and, by extension, @AaveLabs. Out of respect, I think it is important that they have the opportunity to answer directly, without proxies.

On the substance of your message, as stated earlier:

Avara will be a key stakeholder in phase two. Service providers and delegates should keep a relentless focus on the proposal’s merits and maintain a constructive, professional tone so that phase two can begin in a genuinely collaborative spirit and align the interests of all parties involved.

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I am not an Avara employee, and fwiw I don’t have any affiliation to any SP (BGD, ACI,…). Thanks for asking, but no SP tag is needed in this case. I will gladly take a forum participant tag if there is one.

Having said that, I consider this forum an open place for participation, on the topic or how the topic is presented.

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I think the core of the current debate is not about specific proposals, but about a fundamental conflict of incentives between equity holders and token holders that has existed from day one.

Aave was built as a company, but financed through token sales rather than equity. Tokens were sold with the implicit promise of future value capture—effectively equity-like upside—without the corresponding legal or structural clarity.

If tokens are meant to represent a claim on future economic value, then logically the assets and revenue-generating components of the system should eventually belong to the DAO.

If they are not, then tokens were never truly aligned with equity-like expectations in the first place.

The uncomfortable reality is that once the system becomes genuinely profitable, transferring assets or control to token holders is no longer incentive-compatible for equity holders. Keeping assets off-DAO simply maximizes their upside.

This is exactly why the industry is watching Aave right now: how this is resolved will set a precedent for DeFi as a whole.

Am I misreading this dynamic, or is this the core tension we are all circling around?

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Hi CrypValue.

I think the situation is slightly more subtle than a simple “for or against ownership” question.

From my perspective, token holders are trying to update beliefs about the long-run regime the token will end up in. With some probability, meaningful economic value will eventually accrue to the token; with the remaining probability, it will remain a relatively limited governance token. Recent events have shifted probability mass toward the latter, and the community is now trying to understand where it truly stands.

In that sense, the current proposal is less about the immediate mechanics of ownership transfer and more about information and signalling. Very roughly, the team can be thought of as either fundamentally cooperative with long-term DAO alignment or not. A non-cooperative team would never support the current proposal. But importantly, even a cooperative team might rationally oppose it, given concerns about a blunt mandate, legal ambiguity, or the risk of an unsophisticated DAO unintentionally constraining innovation.

This means that a simple “no” vote is not a clean signal of intentions. That is why many participants are looking beyond the vote itself and are instead focused on communication around how the team is willing to engage going forward. In that light, Marc’s question reads to me as an attempt to elicit a clearer separating signal outside the binary vote outcome, rather than as an attempt to force a particular result.

Again, all the above is just my mental model…

All the best,

retail.

PD: The post has been edited because I unfortunately called CrypValue Frida. But this has been the only edit. Sorry…..

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I would argue your argument is an unhelpful generalization that hides the real truth they don’t want to transfer the IP. Still haven’t heard any concrete examples because those problems simply dont really exist. As someone that has worked within DAO’s and facilitated business for and within them I know for a fact, noone you do business with cares where the IP sits as long as they know the licensing rights are in place (if relevant for the agreement - for most agreements its not). And even if they did care, I could just make just as many arguments in favor of why holding it under DAO / protocol control is desirable over a centralized company. The only people that care where the IP sit are the ultimate stakeholders. Which in this case should be the tokenholders, not equity holders that have been funded by tokenholders.

A legitimate concern that is real in a DAO versus equity context, is having over-governance or being hamstrung in what it can and can’t do, having a mandate thats too narrow or permissive. But it has nothing to do with where the economic value sits. It would be helpful if we can center the discussion around the actual concerns here, economic value, of which the IP the most essential piece and the simplest one to solve for.

Aave Labs could get a very clear mandate, under which its abundantly clear to them and any third parties what they can and can’t negotiate. For example, the DAO could give Aave Labs a 20 year irrevocable license to all IP, or a permanent one. And perhaps add a permanent royalty % to make Aave Labs sustainable, but the DAO should decide this transparently.

They would just not own the IP. The DAO would.

I am a 100% sure this discussion would not exist if Aave Labs was a non-profit without shareholders. The interest here is economic, for the team (that likely owns at least 70% of Labs - Stani probably owns at least 50% - probably quite a bit more), and at the expense of most investors (except perhaps ones that have been offered equity - if any) and all tokenholders.

This is indeed the core tension @CrypValue , but Aave Labs is not ready to admit it yet.

Why don’t you simply share the cap table of Aave Labs @stani , it will say more than a 1000 words. But I suppose the fact that it is not being disclosed, tells us even more.

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apparently if you happen to not agree with mr. Zeller (aka “the DAO”) you are either an Aave Labs employee or a fake account.

In their mind they don’t even contemplate the possibility that a regular person is entitled to his own opinions and is free to act accordingly.

This is the future of democracy.

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That was one question directed to Aave Labs so the question of Marc is valid. I am not getting how this means that anyone is a bot. Governance is actually about giving the opportunity to regular persons to share their own opinions, in this case through the forum. I am not gonna give my opinion right now but I think that everyone agrees that one of the good things about DAOs is that this discussion happens in public with everyone involved and not just some telegram chats between SPs.

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“valid” is not a category that you apply to questions. I’m not sure who your employer is but I hope you have a great governance day.

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Aave at a Constitutional Moment: Unifying the Ultimate Claim

TL;DR

At its core, the current Aave debate is not about contracts, licenses, or operational boundaries, but about a deeper structural issue: Aave today has two competing residual claimants — $AAVE token holders and Aave Labs equity holders.

As long as these dual ultimate claims coexist, conflict is not accidental but inevitable. Clearer boundaries may reduce short-term friction, but they do not answer the fundamental question of who ultimately owns the value created in the future.

A durable, long-term solution requires unifying the residual claim — conceptually, by converting equity exposure into token-aligned exposure — so that the system has one objective function and one ultimate claimant: $AAVE.

This is ultimately a founder-level decision. How Aave approaches it will not only shape its own future, but may become a reference point for how DeFi tokens represent real economic ownership across the industry.

I believe the current discussion around Aave is not merely about asset boundaries, service agreements, or operational separation.

It reflects a deeper, unresolved structural issue that Aave — like many DeFi protocols — has carried since its early days.

Two residual claims, one system

Today, Aave effectively has two ultimate claimants:

  • $AAVE token holders, who reasonably expect governance rights and long-term upside tied to protocol success

  • Aave Labs equity holders, who legally control corporate assets, IP, revenue streams, and strategic direction

As long as these two residual claims coexist, conflict is not accidental — it is structural and inevitable.

Even if current assets, IP, and responsibilities are carefully delineated today, new value will continue to be created in the future: new products, new IP, new revenue streams, and new strategic options. When that happens, the question of who ultimately owns the upside will resurface again.

This is not a matter of trust or good intentions.

From a governance and economic perspective, a system with two competing residual claimants does not have a well-defined objective function. It cannot simultaneously maximize equity value and token holder value without contradiction.

Why incremental fixes are insufficient

Attempts to draw clearer boundaries — contracts, licenses, service agreements — may reduce short-term friction, but they do not resolve the core issue.

They answer:

  • “Who owns today’s assets?”

  • “Who performs today’s work?”

They do not answer:

  • “Who owns tomorrow’s value?”

As long as this remains ambiguous, the same debate will reappear whenever Aave succeeds.

A durable solution requires unifying the ultimate claim

For this reason, I believe a long-term, systemically stable solution requires unifying the residual claim.

Conceptually, this could take the form of converting Aave Labs’ equity interests into $AAVE token exposure at an agreed valuation — similar to a share-for-share merger in traditional finance — followed by the retirement of the corresponding equity.

The end state would be simple and clear:

  • One system

  • One objective function

  • One residual claimant: $AAVE

Importantly, this would not be an expropriation of Aave Labs.

It would be a formal recognition of the value already created by Labs, translated into a transparent, long-term-aligned claim that rises and falls with the protocol itself.

Why this moment matters

At this stage, it is also important to be honest about reality.

This decision cannot be abstracted away as a purely decentralized process. In practice, this is a founder-level decision.

Stani holds:

  • Formal influence through Aave Labs

  • Significant voting power through $AAVE

  • Informal authority through legitimacy, trust, and authorship of the protocol

That is precisely why this moment matters.

History shows that many systems did not fail because of technical flaws, but because their founders chose short-term certainty over long-term alignment. The opposite is also true: there are rare moments where a founder can, through a single structural decision, align personal legacy, rational self-interest, and system-level sustainability.

I believe Aave is at such a moment.

Beyond Aave

This discussion goes far beyond Aave itself.

Many leading DeFi protocols face the same unresolved tension between equity holders and token holders. Few have the scale, legitimacy, or influence to address it credibly.

How Aave approaches this question could become a reference model for the entire industry — a demonstration of whether DeFi tokens can truly represent the ultimate claim on the systems they govern.

This is not an easy decision.

But it is a defining one.

@Stani — given your unique position as founder, long-term builder, and a major $AAVE holder, your perspective on this question would be invaluable to this discussion.

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Growing the pie is far more important than arguing over how to slice it. We are now criticizing those who helped grow the pie. It is important to remember that this interface previously had an annualized revenue projection of less than $1 million, and it was Aave Labs that improved it and raised its projected annualized revenue to $10 million. I support addressing the CowSwap interface revenue allocation through a concrete proposal, with the goal of aligning expectations between the DAO and Aave Labs. This would also help establish a clear precedent should similar situations arise in the future, which is a more responsible way to protect the brand and preserve long-term stability.

The concern is that an issue which should have been handled as a specific commercial and governance discussion was instead escalated—without sufficient consideration or rigorous risk assessment—into a binary, all-or-nothing framing. This shift moves the focus away from reaching a practical agreement and unnecessarily amplifies tensions, while introducing risks that were never adequately acknowledged or discussed.

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The problem is not about operational boundaries, but about the ultimate residual claim.

A system with two residual claimants cannot have a coherent objective function.

Corporations maximize shareholder value; DAOs are meant to maximize token holder value.

Without unifying this claim, alignment is structurally impossible.

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DAO should own the brand, IP, website domain.

AAVE lab shall continue to own the front end code, host it in AAVE.com and get the revenue from cowswap integration.

Will this be a balanced and acceptable terms?

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From someone who’s day to day activity is outside of Aave: I want to point out how much this topic has reverberated to the wider ecosystem. The relationships between DAOs and Foundations and Labs is one of the most interesting tensions in the ecosystem. This is especially true from a game theoretical, but also a legal point of view.

There is a huge opportunity here for Aave to slowly, systematically develop something that can stand the test of time. I highly advise to hold the limitations of a discussion on Discourse top of mind, too. Discourse was meant as a technical support forum software, not for complex meaning-making in systems with 100s of stakeholders and billions at stake.

Dennison put’s it very well in his reply. This should take time and should be very deliberate.

And points to something I would recommend, too.

Same sentiment from Sid here:

And Stani is spot on in pointing to a due process being needed here:

Finally, LlamaRisk’s excellent assessment is one of many needed inputs into this discussion.

In my opinion, AaveDAO would be well advised to work through the many open questions raised here first and develop a clear understanding of the relationships these stakeholders have now and what the desired end state is, and why that end-state is desired. Tensions like this are exactly how alignment happens in practice. By acknowledging mutual interests and working through where these interest diverge.

  • AaveDAO want to retain rights to what is essentially a core part of its identity.
  • AaveLabs want to ensure they’re equipped to do business and launch products, with the same success they had in the past.

Both are extremely valid, and also very aligned.

I don’t think anyone can argue that AaveLabs and Avara were anything but competent stewards of the Aave ecosystem. The Aave DAO is the pride of the DAO space and the first example I point to when people ask me “Name one example of a successful DAO”.

The brand and the IP rights are part and parcel of a bigger picture. Getting clarity on ownership, and how ownership works in both legal and smart-contract worlds is also a necessary input.
The last thing in anyone’s interest is the impression of a tumultuous, fractionalized governance that acts on a whim.

DAOs can win, if and only if they manage to make their inherent plurality an asset! The institutions are here, and crypto was built to show that a more inclusive system is an advantage, as it very well can be.

StableLab has long been a friend and supporter of AaveDAO and would be delighted to help with facilitating this discussion, engaging external parties for input and use this opportunity and momentum to materially improve decentralized decision making.

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No, Aave Labs shouldn’t “own the frontend code” simply because… it was funded by the Aave DAO!! That’s precisely the issue

DAO funding doesn’t imply private ownership, it implies stewardship on behalf of the DAO

In the case of the Aave App, it does make sense for Aave Labs to capture a spread between the AAVE rate and the rate offered to end users, since this is one of their own initiatives (even though, there are some additional nuances here, especially given the use of the “AAVE” name for that specific product, but setting those aside for now)

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