If the DAO votes to strip Aave Labs of what they’ve built and Aave Labs decides to fork the protocol and leave, do you think liquidity will follow Stani and his track record, or stay with the DAO?
Let’s reach a settlement and get back to business.
3 Likes
This topic going to a vote is premature and the wrong decision in my opinion.
The implications of this proposal getting accepted or rejected are massive, and are going to cause an even bigger split in the community. We are damaging the Aave community, name and sentiment, while Aave is in its best year ever.
It would be best if all parties with a large influence within the DAO would dial down their stance, stop publicly arguing and find at least some common ground. We can resolve this in a more professional manner than is currently the case, and which is hurting everyone. Do not put this sensitive topic to a rushed vote.
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I wrote this proposal: “ Call to Avara Leadership: Propose Value Accrual for AAVE Token Holders” ([TEMP CHECK] Call to Avara Leadership: Propose Value Accrual for AAVE Token Holders) calling on @stani to finally present a concrete plan for token ownership and value accrual.
The fact: Aave Labs has never proposed any value accrual mechanism for AAVE holders. Not once in years.
Hasu is right: “token/equity dual structures are fundamentally unworkable. Not just hard to structure, but fundamentally broken.”
The current model is fundamentally broken. We need solutions immediately.
2 Likes
What exactly is the DAO trying to achieve by taking ownership of everything?
I don’t think this is good for the token’s long-term price either.
If token holders feel that protocol revenue is not being distributed properly, there are many ways to address that:
they could demand more buybacks, propose burning instead of just buybacks, push for larger buyback programs, or ask for staking rewards.
There are plenty of mechanisms that could support the token’s value in the short term.
We can also imagine adding more utility to the token in the future.
If the DAO were to own everything in the Aave protocol, who would actually be responsible for development?
Would every single update have to be approved through a full DAO vote?
At some point, trusting the team to a reasonable degree is the fastest and most rational approach.
That model has worked well so far, and I believe it will continue to work going forward.
2 Likes
Why do we need Stani or Aave Labs to propose a method for token value accrual? Is the protocol’s (large and growing) treasury not controlled by the DAO? What do Stani and Aave Labs have to do with it?
Excellent question. Let me break down why we need this clarity.
Yes, the DAO controls the treasury. But that’s not the same as token holders receiving value accrual.
Think of it this way:
Traditional Company:
∙ Shareholders fund operations
∙ Company builds products
∙ Profits flow back to shareholders
∙ Clear ownership of IP and assets
Current AAVE Model:
∙ Token holders fund Labs through DAO treasury
∙ Labs builds products and retains IP ownership
∙ Revenue flows to… Avara equity holders?
∙ Token holders get… governance rights only?
The Disconnect:
The DAO treasury has paid Labs for years. With those funds, Labs has:
∙ Built interfaces (now adding fees without revenue share)
∙ Created the Aave brand (now used to promote Avara products)
∙ Developed v3 and v4 (we still don’t know how staking will work)
∙ the AAVE app
But where does the value flow?
That’s what we don’t know. There’s zero framework explaining:
1. Revenue sharing between Labs and token holders
2. IP ownership (DAO vs. Avara)
3. Token utility beyond governance
4. How token holders benefit from DAO-funded development
Is it unreasonable to ask:
∙ Should Labs keep 100% of revenue from products built with AAVE’s brand?
∙ Should Avara own 100% of IP developed with DAO treasury?
∙ What exactly do AAVE token holders own?
This isn’t about removing Labs. It’s about establishing what token ownership means.
The DAO treasury funding Labs doesn’t automatically mean token holders receive value. That’s precisely the broken model we’re trying to fix.
Does this clarify the issue?
6 Likes
Aave Labs built a protocol and frontend with funding from an ICO and the DAO treasury. The protocol makes a lot of money which flows entirely to the DAO treasury, and the DAO is controlled entirely by the tokenholders. The frontend itself has so far made little or no money but there is a path for it to start making money too. It is a good thing that Aave Labs has invented ways to make money because they build on top of the Aave protocol and the more the protocol is used, the more money the protocol makes.
Token ownership means whatever the Aave smart contracts say it means, and lucky for us the smart contracts say tokenholders are the controllers and thereby the beneficiaries of the most lucrative protocol in crypto.
A settlement should be negotiated between Aave Labs and the DAO since the former has historically received funding from the latter. Demanding that Aave Labs turn over its assets to the DAO instead is not only unrealistic but unproductive and detrimental to every party involved.
3 Likes
I am watching this governance crisis unfold, and I am alarmed that we are rushing a ‘Brand Ownership’ vote without an Operational Handover Plan.
Regardless of the political ‘Trust’ issues being debated here, we are ignoring a massive Execution Risk:
If this vote passes and the DAO ‘seizes’ the aave.com domain from Aave Labs, who manages the DNS and Incident Response tomorrow?
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The Risk: If we alienate the current operator (Aave Labs) without a signed Service Level Agreement (SLA) or a designated ‘Technical Council’ to take over keys, we are leaving the frontend undefended.
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The Scenario: If a malicious injection occurs on the frontend 24 hours after this ‘hostile’ transfer, does the DAO have the keys to revert it? Or are we relying on the goodwill of the entity we just fired?
My Recommendation:
We need to pause the political fighting and define a ‘Transition of Services’ workflow. Voting on ‘Ownership’ without voting on ‘Maintenance’ is reckless governance.
- Mo Porgou Senior Project Manager / Risk Specialist
1 Like
Let’s get Aave back on track. No permanent damage has been done and we can turn this into an opportunity to tie up a big loose end and eliminate uncertainty.
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It’s wild how a bunch of people here are arguing about stuff that has nothing to do with the actual vote, and using “reasons” that are either out of scope or just describing the current status quo.
Here is what will happen next:
- The service-provider aligned DAO folks + delegates either abstain or just don’t vote on the rushed Christmas proposal
- Labs votes NO on sharing anything with the DAO (no IP means also no “profit sharing” promise, anything would be only “good will” as it was with Paraswap)
- Proposal fails, then Labs goes “see? we asked the people, nobody wants to change anything” and now they’ve got a nice “will of the people” receipt to keep status quo
- Labs already doesn’t want to share profits with DAO/tokenholders and they’ve tried multiple times to route flows to themselves instead of the DAO. That’s not shocking, once there’s real money, everyone wants their cut
- Regulations are clearer now, and the DAO-as-cover story isn’t as useful. Labs also got a MiCAR banking license, so they can operate more and more legally and more independently from the “shady DAO”. That’s the real trajectory, becoming independent from the money-sucking DAO
- Labs will ship new stuff under the Aave name, using Aave branding (cause they own the trademarks duh), and push it through official Aave channels. They can literally deploy V4, put it on the aave.com site, and direct all fees from protocol + UI to Labs, and the DAO can’t really do anything about it. That’s the endgame. They def won’t share any profits from Aave App (Horizon vibes, and Aave App was funded in-house afaik, correct me if that’s wrong). DAO will get breadcrumbs left from V3, and maybe V4 if they behave.
- In this setup Labs is super efficient (and yeah the Labs-defenders are right on that part!). The most efficient money machine is removing the DAO from the loop. That’s why the sudden Avara → Aave push this year, the aggressive marketing, and the army of employee defenders on socials
- So picture a future where everything Labs launches generates 100% fees to the Labs and 0% fees for the DAO. Cause why not? What’s the DAO gonna do, sue? There’s no real legal entity for it. It’s just a crowd holding tokens, and big companies will never care about that kind of folks, banks would never care, trust and institutions neither.
- Eventually either the DAO finds a new way to monetize and support token value, or the $AAVE bleeds to zero
People need to get this straight: the DAO needs Labs, not the other way around. Labs doesn’t need the DAO anymore, so they’re trying to drop the obligation that only drags them down.
This proposal was basically the DAO saying “if it’s called Aave, the DAO should get some piece of the profits, right? …right?” and Labs answered pretty clearly: “NO”.
So yeah. If you hold $AAVE and you want the DAO to get anything from the Aave brand going forward, you vote YES. Not that it would help… If you don’t care about the DAO or the $AAVE token, you vote NO.
As simple as that.
Aave Will Win.
6 Likes
I’ve read most of this.
Maybe DAO tokens are toxic after all ?
I mean if we are fighting for them to finally capture value, aren’t we defeating the original purpose of blockchain networks ?
The DAO has been gamed the same way traditional governments get gamed by value extractors.
Maybe zero-governance DeFi is the way.
And for the rest, put your equities/stocks natively on-chain.
I expect Aave Labs will keep any revenue they generate outside of the smart contracts, such as in the web UI or in the app, but are there any fees collected by the v3 or v4 smart contracts that don’t go 100% to the DAO? It would be a big departure and risk to move to centralized governance from the collective governance model that Aave has been built on so far.
What changed from ETHLend White Paper in regards to the DAO NOT owning the DAPP frontend till now? More Money?
“The third tier shall be the layer that owns the DAPP. This layer shall be Swiss Foundation or Swiss LLC, which would provide the surroundings for ETHLend and connects the decentralized environment to centralized world. Such connection might not be ideal when we are aiming for complete decentralization. However, such a layer is vital for protecting our users for any liabilities that might occur for the liabilities in respect to different jurisdictions. Swiss Foundation or Swiss LLC would offer limited liability on risk of liabilities. This veil is vital since the regulation on decentralized applications, crypto-currencies and token crowdsale is still living under uncertainty due to lack of regulation.”
2 Likes
MakerDAO had the DAI Foundation, an entity that was charted to represented token holders and held the IP. While the DAO has had plenty of other issues, that part worked pretty well. It would just hold the IP and issue take-downs at impersonators using the MakerDAO brand without DAO approval.
Good question. What changed? I guess the regulation is becoming more clear and friendly there is no need for a wrapper to be scapegoats.
Even when purchasing an apartment, it is impossible to make a decision within just 5 days. The discussion on this matter involves major issues of the AAVE brand, important asset changes in a 70 billion US dollar agreement, and all token holders, service providers and partners. Such discussions and changes require more detailed discussions and more details to ensure that the interests of all parties are weighed and their concerns are resolved.
AAVE Labs unilaterally pushed for the vote without even communicating with the proposal initiator. This shows that they believe the vote is beneficial to them now. AAVE Labs and Stani were extremely arrogant during the discussion, not responding to everyone’s questions. Their previous numerous unscrupulous actions have made the DAO extremely frustrated. This time, you have become famous and gained widespread attention, allowing everyone to see your despicable nature.
The response strategy of the DAO should depend on the extent of the dishonesty of AAVE labs and Stani. The DAO needs to enhance overall coordination. We have already lost our interests many times. We must unite more closely and have strategic thinking. No matter how dishonest AAVE labs and Stani are, we must have corresponding response strategies.
Munger said that to obtain something, one should make oneself worthy of it. The current bad reputation of AAVE labs and Stani is the result of their lack of boundaries, which is a self-inflicted consequence of their own actions: Everyone is supporting the DAO, except for AAVE labs, Stani himself, and their side project.
We never deny the contributions made by AAVE labs and stani. However, when power is unrestrained, greed will arise. The AAVE DAO must prepare for the worst-case scenario. If AAVE labs and stani act independently and do not reflect on their mistakes, we can indeed consider dismissing and replacing them. Although a win-win situation is the better solution, the prerequisite is that the other party should be someone with an excellent character and integrity.
Please all AAVE token holders unite and cast abstention votes. This is to fight for your own rights!
Why this proposal matters, and what gets lost in the noise
Let me keep this grounded.
Aave is one of the very few DAOs that consistently produces real, recurring protocol revenue at scale. That engine did not run on autopilot. Over the past three years, it has been maintained, upgraded, protected, and expanded by an ecosystem of independent service providers, builders, delegates, voters, and contributors who show up every day to ship work, onboard strategic assets, curate risk, and keep the protocol safe and competitive.
If you want a simple mental model: the DAO is the engine, while brand assets and distribution channels are the storefront and the signage. The problem is not that private companies exist. Private companies should build products. The problem starts when one private actor has unilateral control over the storefront and signage, while the DAO ecosystem is the one keeping the engine running.
The historical context: Avara’s pivot
To understand why the DAO is the primary operational driver today, you have to look at the timeline.
Starting around late 2021 and through 2022, the entity formerly known as “Aave Companies” rebranded to Avara, a neutral corporate name that explicitly reduced the direct association between the private company and the protocol. During that period, focus shifted toward separate ventures, most notably Lens, and other product initiatives.
This is not a moral judgment. Private companies can and should allocate resources where they see fit. The governance question is simpler: when the protocol’s day-to-day execution is carried by the DAO ecosystem, should strategic Aave brand assets and distribution remain under unilateral private control, or should ownership sit with the DAO and be delegated under enforceable mandates.
Who actually carried execution, and what it produced
For the last several years, the bulk of day-to-day execution has been carried by the DAO’s service provider ecosystem.
That includes:
- risk management and parameter updates
- governance execution and coordination
- upgrades and technical stewardship
- strategic integrations and ecosystem growth initiatives
Teams like Chaos Labs, LlamaRisk, BGD Labs, TokenLogic, and ACI have done the work that allowed Aave to remain dominant through cycles.
But this is not just “maintenance”. It is active, compounding market share and revenue generation.
Service providers, including TokenLogic and ACI, have been key players in winning integrations and institutional relationships that drove real users and real borrow volume toward Aave, with the upside flowing back to the DAO via protocol revenue.
A non-exhaustive list of initiatives and wins that illustrate this dynamic:
- EtherFi and the broader LRT wave: onboarding and ecosystem coordination that helped Aave become a primary venue for LRT liquidity and borrowing demand.
- Aave Prime market: Third market of Aave in term of size, reinforced narrative of the ability to deliver curated and lowest risk DeFi and reinforced our relationship with the LST/LRT ecosystems.
- Ethena: integrations and risk work around USDe-related markets that became a meaningful contributor to stablecoin borrow volume and revenue.
- Pendle: ecosystem coordination and market enablement that brought incremental users and activity into Aave markets.
- BTCfi: expanding BTC-related collateral and markets, supporting a major narrative and user demand segment.
- Plasma: a deployment that has already become the second largest network for Aave, contributing meaningful activity and relevance.
- Consensys/Linea and MetaMask integration: distribution-level integration that drove user flow and visibility.
- Rabby wallet integration: improved UX and access for power users, pushing real usage.
- Kraken/Ink: institutional-grade distribution and access paths.
- Bitget Wallet: retail distribution channel integration.
- OKX/X Layer: another major distribution vector bringing users and volume.
If you interact with Aave today, there is a high chance you are using collateral markets, borrowing flows, risk parameters, or incentive programs that were designed, implemented, reviewed, or maintained by independent DAO service providers rather than the original corporate entity.
What is essential here is the curation.
Curation of strategic priorities, the balance between risk and rewards, and the continuous calibration of safe risk parameters is incredibly hard. It is also what allowed Aave to remain safe while still thriving, when competitors with inferior execution fell behind.
The Aave DAO service providers have done stellar work in this regard, and it is work that none in the ecosystem have been able to replicate at the same standard.
This also needs to be stated clearly: innovation and iterative, massive improvement to the Aave V3.x codebase and to GHO have been delivered by DAO service providers. In practice, the DAO has led both execution and innovation.
This makes the Aave DAO unique.
A personal disclosure on alignment
As a former employee and someone here from day one of Aave (not ETHLend), the internal narrative and incentive alignment was token-first, and the same message was carried to external investors. In my case, vesting terms were expressed solely in token terms. I do not hold Avara equity via vesting or acquisition. My incentives have stayed consistent: I have concentrated my efforts on the Aave protocol and $AAVE token because that was the vision we signed up for.
More broadly, it is important to understand that many of the people and teams who built Aave’s operational success over the last three years are now operating on the DAO side, not inside Avara. Several key contributors have spun out to build independent companies committed to the DAO’s long-term success, and many high-impact contributors joined on the DAO side because they believed in the protocol and the token alignment model.
One concrete illustration is how much of the original talent base now contributes through independent, DAO-aligned entities. For example, Ernesto (former CTO) and Andrey (a critical contributor to the Aave.com front end, among other things) have supported execution through independent teams focused on the DAO’s long-term delivery. Another example is David, a former engineer, who went on to found Catapulta and deliver critical infrastructure used by the DAO.
The point is not any individual story. The point is the pattern: a meaningful portion of the “genesis” talent and the most strategic builders are now working independently in the DAO ecosystem. That is a big part of why Aave has been able to keep shipping, keep curating risk properly, and keep compounding market share through multiple cycles.
If value is structurally transferred away from the DAO and toward a private entity, we will lose key talent and weaken the very ecosystem that made Aave successful.
Compensation context: high ROI, low extraction
There is often a misconception that service providers are “extracting” value. The opposite is closer to the truth: service providers are heavily token-aligned, and the cost of maintaining the Aave DAO’s professional execution has been small relative to the value preserved and created.
For transparency, here are the main ACI compensation mandates (with references). Note that some phases were shortened or restructured, which reduced realized amounts versus initial projections.
| Period / Item | Status | Amount | Reference |
|---|---|---|---|
| ACI Service Provider (Initial) | Completed | 250k aUSDT | [ARFC] - ACI Service Provider 6 month Proposal |
| ACI Phase II | Completed | 375k | [ARFC] ACI Phase II |
| “Ad Astra” budget | Completed | 1.0M | Aave - Open Source Liquidity Protocol |
| Phase IV stream (later restructured) | Restructured | 1.5M | Aave Governance - Proposal 301 |
| Ongoing stream with Service Providers Compensation Reform (current) | Active | ~200k + 250k$ AAVE | Aave Governance - Proposal 401 |
Total approved across the items above (nominal): ~$3.5M over three years, for a team of 11, with realized amounts lower due to restructuring and timing.
When you compare that to the scale of protocol revenue and market position preserved and expanded through DAO execution, this is not a story of extraction. It is a story of professionals being paid to keep the engine running, while remaining structurally aligned with the token.
Why this matters for the IP and distribution debate
When control of the “storefront” (domains, handles, naming rights, trademarks, distribution channels) sits outside the DAO, it creates a structural risk.
Even if the private actor behaves well today, unilateral control means:
- terms can be changed unilaterally
- distribution can be redirected
- monetization can be captured
- the DAO’s negotiating power stays structurally weak
This is unnecessary. Avara can thrive, and the DAO can thrive. The clean solution is straightforward:
- Ownership of strategic brand assets should sit with a DAO-controlled vehicle.
- Management can be delegated back to Avara under a clear, enforceable mandate.
- Monetization should be DAO-defined and negotiated from a position of ownership, with fair terms for everyone involved.
We are not asking for a favor. We are asking for governance and ownership to reflect the reality of who built, maintained, and grew the protocol over the last four years.
Aave is still a goose that lays real golden eggs.
But that goose did not grow itself, and it does not stay healthy on autopilot. It is fed, protected, and continuously improved by an ecosystem of contributors who show up every day to curate risk, ship upgrades, maintain integrations, and keep the protocol innovative and competitive.
If the system stops being fair, and stops rewarding merit, the outcome is predictable. Talent will exit, quietly at first, then all at once. The people who keep the engine running will not keep doing it indefinitely if the rules signal that their work is optional, replaceable, or taken for granted.
And only then, when the goose is no longer laying as many eggs, will everyone fully understand what Aave lost.
DeFi will win.
19 Likes
Calm down！@stani
Recall the original aspiration and goals of building Aave.
2 Likes
Very disappointed to see Aave Labs’ conduct in this affair. They have this wonderful community of people that actually care for the protocol and the tokens (and for Aave Labs role in that), most of them also users of the Aave product. They then have the opportunity to set a positive precedent for decentralized protocols, and further strengthen their reputation as leaders in the industry, and instead self-interest prevails. None of the concerns are addressed, only deflected. No counter proposal has been made. No settlement has been proposed. Just empty words and machiavellian moves to bury the concerns.
I think Stani should also abstain as a controlling shareholder of Aave Labs. This is a clear conflict of interest.
I am not saying he cannot vote on matters. I am saying he cannot vote on matters where he has a direct and substantial interest in an outcome. In this case, IP and revenue will fall in an entity he controls instead of the DAO. Under corporate law this would not fly. It’s like Zuckerberg voting his META shares to have all META IP and part of the revenue in a company he owns 100% of. As a key leadership figure in a decentralized protocol, his standards should at least match, and ideally exceed, those of the corporate world.
$AAVE will and should trade at a discount if it does no own it’s core economic assets.
Will be voting Abstain myself to signal against Aave Labs conduct.
4 Likes
Folks, pls stop the Twitter war. Is not going to do any good. Let’s talk here.
3 Likes