Folks, pls stop the Twitter war. Is not going to do any good. Let’s talk here.
3 Likes
Instead of “storefront” why not “storefronts”? Instead of becoming a bank, why not become the central bank? The “banks” (Avara, Defisaver, etc) build on us because of our liquidity, not because of our brand. Aave protocol as the central bank should encourage a proliferation of banks with Avara serving as the first example and as a model for others. We want as many of them as possible and we want them to operate independently. The central bank, the protocol, is only here to provide liquidity.
We risk so much by hamstringing and alienating the best “bank” in our ecosystem. Let’s be satisfied with the (massive and growing) revenue generated by the greatest protocol in all of crypto instead of seeking to absorb the revenue of any product that dare build on top of it. Let’s facilitate an ecosystem of builders like Avara that cater to users and source liquidity from the protocol. Let’s negotiate a settlement.
2 Likes
The war is over. The DAO is over. Avara won.
They voted down proposals that didn’t serve their equity. They refused governance engagement. They refused to build frameworks aligning token holders with protocol success.
In TradFi, this behavior would trigger shareholder lawsuits. In DeFi? Still the Wild West.
Aave had the opportunity to set a transformative precedent for web3. Instead, we got the worst possible outcome: greed won, token holders got rekt.
This is what “decentralization” looks like when founders control the vote.
emilio act like a kid the whole time with a real weak logic and tell anybody that you guys don’t have enough information and all of you don’t even are token holders( which is so funny to say that ) it is pretty obvious to me he don’t want to listen and he don’t want to participate in the discussion here because he don’t have the logical response for token holders and Dao concerns , this is so unfortunate , Aave is the unicorn is crypto space , but these guys don’t want to remember that it initially funded with ICO. despite the huge respect that i have for Stani i think he just don’t want to listen to community what so ever too.
Exactly. Positive sum / abundance vs Zero sum / extraction.
1 Like
Token/equity dual structures are fundamentally unworkable.
Hasu
Until we address the elephant in the room, this issue will drag on indefinitely
1 Like
This isn’t really true, all that is needed is for the incentives to be aligned such that both parties, working in their self interest, help each other in the process such that “everyone” (excluding whoever is the other end of that revenue) wins. Otherwise markets as a whole, with many different selfish actors, from companies to market makers to arbitrageurs, wouldn’t be able to exist. Right now I’m concerned incentives aren’t fully aligned, but it is fully possible for AAVE Labs to get revenue from various sources (funding by the DAO and additional fees) and still help the AAVE DAO/token gain value (promoting AAVE and building products that use it).
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Yes! Ownership of each “bank” is represented by equity and ownership of the “central bank” (the protocol) is represented by tokens. There is no dual structure and the dispute evaporates.
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illegitimate vote. voting abstain.
2 Likes
Unfortunately this discussion and debate is going the way I feared.
The court of public opinion is fickle and tricky beast.
My suggestion is this:
- Table discussion till the new year
- An AAVE convention is called, a physical event, in a physical location, where the key stakeholders can come together in person, and discuss.
Hashing this out on Twitter and the forums is a terrible look, and it’s clearly not doing the AAVE brand any favors. It would be much better to get the relevant teams and people together in person to do an in person conference over three days to discuss all the relevant parts of this.
Dennison
5 Likes
I’d like to offer some constructive insights that might help here. I co-founded PoolTogether and built the PT DAO alongside others, and currently run a service provider to the PT DAO. Our DAO went through similar problems.
tldr; the real question is whether Aave DAO wants to form a legal entity.
I read the original AL Service Provider Proposal and have some thoughts:
Brand Licensing
The proposal included the design of a new visual identity, and regarding the licensing it states:
The visuals and the New Visual identity are subject to and governed by the license specified in the approved governance proposal by the Aave DAO.
It seems to me that the Aave DAO need only vote on what license to apply, then it will become applicable as far as this is written.
However, there must be a legal entity that holds the license in order for it to be legally enforceable (unless it’s CC0, but i don’t think that’s the intention).
It might also be worth mentioning the code’s Aave V3 Business License:
Licensor: Aave DAO, represented by its governance smart contracts
This doesn’t strike me as having strong legal footing because the Aave DAO doesn’t have a legal entity. I haven’t seen any cases of infringement, but perhaps it’s because potential copycats have been either acting in good faith or believe it’s actually Aave Labs they’d have to deal with.
Risk
Separately, it is also worth thinking about risk. The token holders control the protocol; arguably, the liability falls on us. If a black swan loss occurs, then there is no legal shield to protect token holders from litigation. An entity would help shield holders by being the primary target.
Deliverables
The proposal defined Aave Protocol V4 as the key deliverable. If I put my dev shop hat on, then this strikes me as just being the smart contracts, supporting infrastructure, and their deployment. I don’t imagine this includes iOS, Android, or Web apps (or hosting for that matter!). That being said, it’s loosely defined so I can understand if people interpret the scope as including an interface.
Personally, I think it’s stronger if there are multiple frontend teams that have their own sustainable revenue streams. The protocol will still have it’s own stream to fund protocol management and development.
Reframing the Temp Check
I think it would be helpful to step back and take a less combative approach:
- Create a temp check as to whether or not the Aave DAO wants to form a legal entity.
- If the check passes, then proceed with the entity creation and create a proposal which asserts the ownership of the brand and licenses the brand to Aave Labs.
This feels like the natural next step for a DAO as large as Aave. Once the DAO legally exists then discussions around aave.com and other properties can continue.
Perhaps in the future the DAO and Aave Labs can serve the $AAVE token as equals.
Then $AAVE will win.
12 Likes
Looks like Parafi Capital is voting NAY with significant size.
I would be interested in their view and why they are supporting it and if there are any relations between Parafi and Avara.
Disclosure of Avara’s ownership structure feels necessary.
We are dealing with orld world opaqueness. Incentives should be clear for all.
4 Likes
We should remember that Aave is where it is today thanks to the combined efforts of the DAO, service providers, Aave Labs and Avara. The current situation is not good for anyone, and the next few years bring huge stakes for the entire ecosystem.
As token holders, our interest in value capture and governance legitimacy is fully valid but we should avoid an extractive, zero-sum mindset. The same applies to Labs andAvara their growth and ability to execute should not be weakened, in fact, it should be enabled, because they’ve been doing strong work.
That said, any revenue generated through Aave-branded surfaces must be transparent and non-arbitrary, clear breakdown of revenue streams, fee parameters, recipient addresses, and permissions to change those parameters. Otherwise, we risk replicating the worst patterns of traditional finance, and we undermine the trust that holds this ecosystem together.
A practical path forward could include temporary safeguards (e.g., fee escrow or a temporary cap / freeze on unilateral fee changes) while we converge on a proper Phase 2 execution package: asset inventory, transfer timeline, security standards, and a clear stewardship mandate (SLA + revocable delegation).
Because the principle matters but the current process/spec is still evolving, I will vote ABSTAIN while continuing to actively follow and contribute to the debate.
9 Likes
From our perspective, this entire proposal and process has not been appropriately managed from the very beginning.
- To begin with, this proposal should never have been an ARFC, and should have been a TEMP CHECK at best.
- Secondly, the way all parties have conducted themselves in this situation has left a lot to be desired. The discussion on the forum has not focused at all on the holistic, wider issues we mentioned in our comment a few days back and has instead turned into a “Labs vs. DAO” situation, which has served to portray the entire ecosystem in a poor light across the entire space.
- Thirdly, it is clear that all parties need to go back to the drawing board and start afresh. This proposal is not close to sufficient in capturing the complexity of the issues that are being debated here, from how service providers should interact with the DAO and with each other, to the DAO having a legal wrapper or entity and what the ramifications could be, to how revenue should be distributed to the DAO and how tokenholders accrue value. This proposal insufficiently bundles together a minor component (brand/IP) and has led to a significant amount of noise that detracts from all the core issues at hand.
We considered long and hard about whether we should abstain from this vote or vote No. The primary issue here is that abstaining indicates that we are somewhat in favour of how this issue has been handled from all sides - and we are not. We have always voted neutrally and on the merits of each proposal, and voting to abstain on a proposal that we feel very inadequately captures the essence of what the discussion should be, would be incorrect. This topic needs to be handled extremely professionally, bringing organisational and structural clarity befitting the scale, reputation, and primacy of the Aave ecosystem. To achieve this, a fresh start is necessary and all discussion viewed through the lens of this current proposal ultimately being value destructive for the Aave ecosystem.
We will vote No on this proposal, from a very clear standpoint that this proposal itself is inadequate and this situation has not been handled to a professional standard, and that voting in any other way would indicate our agreement with the proposal as it stands or even as it was initially drafted last week. We want to very clearly state that we will be in favour of a proposal with a clear vision and structure, with each and every point that needs to be clarified being laid out clearly (e.g., revenue distribution, DAO legal entity, ownership of assets, etc.), being brought to the table in January.
6 Likes
Did you get some stock options? A full disclosure might be needed and a future audit to all relevant parties (the audit must be paid by the DAO) Governance is becoming a joke.
This debate is being framed by many as tokens versus equity and standing up for the rights of tokenholders and setting a precedent for the industry, but it is actually none of those things. This is about the path forward for Aave and that’s it. Whether we want to be a bank (with IP and an official frontend) or the central bank from which all banks source liquidity.
We don’t need to bear the burden of the countless tokens who’s only chance for fundamental value hinges on transforming into something akin to tokenized stock. The AAVE token is different. We bought it because it has real control over a real protocol generating real revenue.
We should indeed set an example for the industry and that example should be the immutable control our token has over our protocol’s revenue, not how to transform a token into stock.
2 Likes
Quoting Areta:
“To begin with, this proposal should never have been an ARFC, and should have been a TEMP CHECK at best.”
I agree with the underlying concern around governance sequencing and process maturity. However, it is important to be explicit about how and why we arrived at this point.
This Snapshot vote was initiated by Aave Labs without the author’s consent and without forum consensus, bypassing established governance processes.
Regardless of intent, this approach is forcing tokenholders to take a position before the proposal has been sufficiently debated or understood, particularly with respect to scope, structure, and framing. This is further compounded by reduced participation due to holiday timing.
Under these circumstances, the current Snapshot vote is not an appropriate mechanism for advancing or deciding on a topic with such significant implications for tokenholder value accrual. Sufficient time for informed discussion, voting, and convergence at the forum level is required before progressing further.
For these reasons, I am voting ABSTAIN as a procedural signal to allow more time for clarity and convergence, and to avoid rushed decision-making.
8 Likes
This is how self governance perform without a clear leadship.
From an LP and aave holder perspective:
1- AAVE as a protocol is earning good amount of revenue. Clearly the amount spend on AAVE token burn is negligible, esp when you compare HYPE protocol. Please do not give your all kinds of argument here. This is straight forward. Protocol earn money, and pay back to token holders directly by reducing token supply. I believe most of the real aave holder do not want so called DAO treasury to manage the core revenue for AAVE token holders.
2- The DAO treasury’s control has been under the finance committee. The process is legitimized via on Chain vote. The finance committee who in-turn are paying themselves from the treasury. The finance committee also controls payment to other SPs. Together, the finance committee and key delegates-ACI controls how the money are spent- Mostly on themselves and their allies. This is like a company managed by it’s senior management and loss touch with shareholders.
3- The current leading status of AAVE is not how good AAVE, rather is how bad it’s competitors are. For the industry a whole to thrive, we need more mature management and accountability. The current ACI consortium+Finance committee style will leads AAVE to nowhere in future. The medium to long term development needs proper lead-ship and strategic planning. It also needs interest alignment-apparently these who holds AAVE tokens most are more aligned compare to the current SPs who usually sell AAVE token when receives it.
4- Until the inherent conflicts of interest are resolved, such scenarios will emerge again.
2 Likes
Sharing an experiment we set up in parallel to this discussion, in case it’s useful as an additional signal.
We created a futarchy conditional market that estimates the expected AAVE spot price under two outcomes:
-
YES: AAVE price if Token Alignment (Phase 1) — or an alternative proposal explicitly confirmed by eboado — is approved by AaveDAO before the end of February 2026.
-
NO: AAVE price if it is not approved by then (or if eboado confirms his proposal is rejected).
This is not a prediction market on whether the proposal will pass. It’s a market on what AAVE’s price would be conditional on each outcome, intended as a value signal so people can put their money where their mouth is.
Market UI:
https://app.futarchy.fi/markets/0xFb45aE9d8e5874e85b8e23D735EB9718EfEF47Fa
We recently made a post about this on X (_futarchy). If you think the implied price impact is wrong, trading against it is how that signal improves. Feedback welcome, especially on condition wording or pool design.
We only seeded 10k in concentrated initial liquidity ourselves, so for larger trades we recommend limit orders. Our UI doesn’t support them yet, but you can create limit orders here on CowSwap.
For transparency: it’s permissionless, non-custodial, built on Gnosis Conditional Tokens.
First you need to split GHO into YES_GHO and NO_GHO (you can use the UI, or interact directly with the futarchy router. All custody is in the Gnosis CTF contract, same contract used by Polymarket.
You can see more details of the proposal on (including the addresses of the conditional tokens) on the proposal contract.
Here is a link to trade YES_GHO for YES_AAVE to buy AAVE such proposal passes (until end of February):
Here is a link to trade NO_GHO for NO_AAVE to buy AAVE if the proposal fails (until end of February):
It would be very nice if @eboado or Marc and other supporters of the proposal would be willing to place limit orders, buying AAVE at slightly above market price if some alignment proposal would pass, as a signal that they believe this will be good for tokenholders.
Also, it would be nice if @stani and others against the proposal would be willing to buy AAVE at market price, conditional on no such proposal passing. If you think this proposal is bad for AAVE tokenholders, it should make sense for you to also be willing to buy AAVE at near or above market price conditional on no such proposal passing.
Please reach me out if you have more questions, are interested in making trades, or would like to provide more liquidity to these markets.
Contracts:
Futarchy Router: 0xAc9Bf8EbA6Bd31f8E8c76f8E8B2AAd0BD93f98Dc
Gnosis CTF (Custody): 0xC59b0e4De5F1248C1140964E0fF287B192407E0C
Proposal Contract: 0xFb45aE9d8e5874e85b8e23D735EB9718EfEF47Fa
YES_GHO: 0x01917fD18c1019389cC89457c53E6631A13c1e9D
NO_GHO: 0xA31EF4bEfE367064fB0D8863A3E0AAD50054B917
YES_AAVE: 0x63Ad5275380416b3700B84BFaD3B74ED812dfAE4
NO_AAVE: 0xf7c5a22Aeeb87c8E06b1a2bF40ab46c1e944f837
The Snapshot vote is now closed.
Despite an unfair timeline and every practical disadvantage stacked against the DAO, participation broke records, with 1,8M total voting power expressed. That is not a defeat for decentralization. It is the opposite of apathy, and that is exactly what a healthy DAO should look like.
Before anything else, we want to express genuine gratitude for the support shown over the past couple of weeks. Your voice matters. We may never know your name beyond a handle, or your face beyond a profile picture, but we will remember the people who showed up. Every delegation, every vote cast, every comment written in good faith is part of the record. We’re grateful for it now, and we will remain grateful for it going forward.
Record turnout is good news for a real DAO
This vote happened under conditions that objectively reduce participation: a compressed timeline, a holiday period, and a debate that was still actively evolving. And yet, turnout was massive.
When a mature, legitimate vote is re-run with the author’s consent and a complete discussion cycle, participation should be even higher. That is exactly what you want from governance: broad engagement when the stakes are high.
The debate delivered its core goal: clarity
The intent of this debate was to bring clarity. Regardless of outcome, we got it.
A large portion of token holders and delegates explicitly declined to sign a blank check for unilateral control. And a narrow result on a compressed Snapshot process cannot reasonably be framed as broad, enthusiastic endorsement of the status quo. The discussion did not get shut down. The margin was thin. The concerns remain.
This is a win for decentralization. It shows that serious governance questions cannot be dismissed by timing, posture, or narrative management.
It is also a signal to Avara: if they want durable legitimacy, they need to engage token holders’ concerns directly, answer concrete questions concisely, and make their case constructively ahead of any future vote. That approach strengthens Aave. It also reduces needless reputational cost for everyone involved.It’s never too late to do what’s right. Phase 1 will continue until the framework is mature enough to justify escalation to a proper vote, with the author’s consent. A collaborative mindset from everyone involved is the best outcome, and the strongest framework to protect $AAVE long-term.
The vote results, and what they actually show
Final outcome:
- NAY: 994.8k (55.29%)
- ABSTAIN: 741.6k (41.21%)
- YAE: 63.0k (3.50%)
Two observations matter.
First, ABSTAIN alone represented 41.21%. And when you add YAE (3.50%), nearly 45% of voting power either abstained or explicitly supported the proposal. That is not “broad endorsement.” It is a very large share of the governance base declining to grant a blank check under the conditions of this Snapshot.
Second, delegation diversity differed materially. NAY came from roughly 100 voters, but the vast majority of that voting power was concentrated in a single cluster made up of a handful of addresses. By contrast, ABSTAIN and YAE reflected roughly 1,100 voters, with the most diverse delegation cluster (>750 addresses) sitting on ABSTAIN. The result highlights the difference between concentrated voting power and a well mobilized, broadly expressed community voice.
Where we go from here
This was not the end. It was day one of clarity.
The DAO has demonstrated engagement, resilience, and the ability to mobilize at scale. The next step should be to return to a legitimate process, with the author’s consent, adequate time, and a constructive path where all stakeholders sit at the same table and agree on enforceable terms.
We remain focused on the outcome that benefits everyone: strategic assets owned via a DAO-controlled vehicle, day-to-day operations delegated under a clear mandate, and monetization defined and enforced in alignment with $AAVE token holders.
If we keep the discussion grounded and the process legitimate, this can still converge to the right outcome. The energy and participation we’ve seen these past weeks is proof that fuels optimism and demonstrates what Aave can look like when established governance is treated with the seriousness it deserves.
DeFi will win.
24 Likes