From my personal point of view, while the COI topic is important and governance already has established COI practices such as disclosures, I find this proposal poorly written in all respects. It expands a kind of non-binding and non-factual oversight to anyone who is a “beneficiary of a proposal,” a term that is not defined. In its basic form, this would pull virtually any user into the framework as “mandatory” and, on top of that, could amount to doxxing. This kind of drafting and language ultimately results in misuse.
The whole point of token governance is to enable participation with tokens one owns, with full sovereignty. We should think carefully before expanding “soft” governance outside of token governance, especially when, as the author states, such soft governance creates a “lack of legitimacy.” A DAO should run on token governance, not on overnight “social contracts” that diminish the legitimacy token governance provides.
I will vote no on this proposal, in light of hoping to see a more reasonable and well-thought-out COI framework that actually makes sense.
I’ve watched nearly all of your podcasts and videos, and I genuinely believe you’re one of the rare idealists in this industry. I can also understand how the recent conflict may have affected you personally.
To be candid, it seems to me that both the DAO and the Labs have reacted more strongly than necessary. At its core, the tension comes from misaligned responsibilities, authority, and incentives—this is a system design issue rather than the fault of any one party. When we rely on moral expectations instead of clear, enforceable rules to constrain an individual’s behavior, it often turns into a kind of tyranny of the few over the many.
As an ordinary AAVE holder, I sincerely hope you can help drive a framework that reconciles the interests of both sides as soon as possible.
I want to raise an important concern about the current Snapshot. Three unidentified addresses with significant voting power are voting NAY. These same addresses also voted NAY on the proposal that initiated the current Labs-DAO conflict.
Pattern Analysis:
These addresses appear to have been dormant previously and are now being activated to vote against community consensus. This raises serious questions about voting power concentration and governance manipulation.
Transparency Request:
Can we identify who controls these wallets? This information is critical for several reasons:
Regulatory risk: With the Clarity Act approaching, concentrated, opaque voting power could support classification of $AAVE as a security due to insufficient decentralization
Governance integrity: Token holders deserve to know if coordinated voting is occurring
Accountability: We need transparency about who wields this much influence
Additional address to verify:
0x2764f4F458f5B2d44Cc817468777F665e1261FAa
For transparency: can Labs confirm or deny ownership of these addresses? Strong suspicions exist that they belong to Labs/Stani.
I don’t want AAVE classified as a security because of one entity’s poor governance.
My two cents (posting in a personal capacity) is that I have been a holder since it was EthLend and then Aave. I have believed in Aave before I joined, and now I feel this proposal would silence my voice for working at a company. I would think we want people who support the coin in the company as well. We are all supporters of crypto and all want Aave to succeed.
I think it’s worth exploring what we are looking to accomplish here and why there would be a conflict of interest when our interest is for Aave to be successful. Some of the DAO once worked for Aave before, do I need to leave Aave to be able to vote?
I fear we might go down a path of a witch hunt trying to figure who voted and who didn’t and who is linked to what DAO and interest group (Which has begun)
Thanks for chiming in. Let me give you my 2c now.
I want to address your concerns because I believe there is a fundamental misconception about what a Conflict of Interest (COI) framework actually does.
It is not about silencing voices, but protecting the Treasury
No one is asking you to leave Aave to vote, nor is this framework intended to prevent you from voting on technical upgrades, risk parameters, or ecosystem expansions. Your voice there is highly valued. A COI policy simply means that if the DAO is voting on a budget renewal, a grant, or an audit explicitly concerning any SP, team members associated with that entity should recuse themselves from using their tokens to approve their own funding. This is standard fiduciary practice.
The “We all want Aave to succeed” assumption
While we all share the macro-vision of Aave’s success, micro-incentives can differ. The DAO’s fiduciary duty is to optimize treasury spending and demand accountability from Service Providers (SPs). An SP’s natural incentive is to secure its funding and operational freedom. When these two overlap in a governance vote, a structural conflict of interest exists, regardless of the good intentions of the individuals involved.
Transparency is not a “Witch Hunt”
Maturing from a tight-knit community into a global financial infrastructure requires predictable and professional guardrails. Mandatory disclosures are not about witch-hunting; they are about establishing a baseline of trust. If a delegate or a voter is being paid by an SP, the broader DAO deserves to know so they can contextualize that vote. We have seen similar frameworks successfully deployed in MakerDAO/SKY and Arbitrum, precisely to prevent “shadow” lobbying.
We are not punishing contributors for working at Aave; we are simply drawing a necessary, professional line between those who allocate the capital (the DAO) and those who receive it (the SPs).
Happy to keep refining this framework together so we can protect the protocol’s integrity while keeping our best talent aligned
Again personal capacity here. Thanks appreciate you taking the time to reply. My response and concerns to your points made:
1. Protecting Treasury
I understand the goal is to avoid the appearance of self-approval. At the same time, in traditional companies, employees who own shares can still vote those shares, even if outcomes indirectly affect them. In Aave, voting power comes from token ownership. If certain contributors are asked to step aside, are we comfortable effectively modifying what ownership means? What do you think the long-term implications of that would be?
2. Structural Conflicts Regardless of Intent
Incentive differences exist in any system, and that’s valid to acknowledge. But normally, having a potential interest does not automatically remove someone’s shareholder voting rights — transparency and broad participation are relied on to balance incentives. In a DAO, where voting is open and visible, could that same balance apply? Are we certain exclusion is the only way to manage structural conflicts?
3. Transparency
I support transparency, but I worry about unintended effects. If voting legitimacy becomes linked to disclosure of identity or employment, are we comfortable with the pressure that may create to “verify” who is behind a wallet? Over time, could that move us toward a softer KYC-style environment in a system designed to be pseudonymous? How do we preserve openness while adding guardrails?
Transparency isn’t inherently a witch hunt, but if we don’t know who owns what wallet could we end up in a situation whereby we only take into consideration votes made by wallet we know of? How do we stop a situation like that occurring?
Thank you for sharing your perspective and for highlighting the concern about individual contributors. I think it’s crucial we address this directly because there seems to be a slight misunderstanding of the true target of this COI policy.
I completely agree with you on one core point: This policy should not punish or disenfranchise individual team members working for a Service Provider. If an individual developer or risk analyst at an SP wants to use their personal AAVE stack to vote on a technical upgrade, a new asset listing, or risks parameters, they absolutely should. Their expertise is valuable.
However, we must look at the macro picture and the existential threat Aave currently faces. The real issue is not the individual employee; it is the aggregate power of SPs as entities and the perceived centralization of governance.
The Decentralization Illusion & Regulatory Risk (The SEC factor)
Currently, Aave governance risks being held hostage by the assumed votes of an SP (like Labs), potentially distributed across merely a handful of anonymous wallets. If ~4 wallets can unilaterally decide the outcome of a vote, we are not a DAO. We are a centralized corporation masquerading as a DAO. In the eyes of regulatory bodies like the SEC, this high degree of centralization completely shatters the defense that AAVE is a sufficiently decentralized protocol. This is the biggest existential threat to Aave today. We must demand an answer on this topic, and you can push for it too.
Entity-Level Recusal vs. Individual Bans
The goal of the COI framework is not to stop John or Jane Doe from voting. The goal is to enforce mandatory recusal for the aggregate entity (the SP’s treasury and associated founder/whale wallets) when the vote directly impacts their own financial interests.
Example A (Allowed): An SP employee votes on onboarding a new LST. (No conflict).
Example B (Conflict): A cluster of 4 whale wallets associated with an SP votes to approve a multi-million dollar budget renewal for that exact same SP, or votes to block funding for a direct competitor.
Moving Forward
We need to establish a framework that limits the aggregate power of an SP during conflict-of-interest scenarios, without policing the personal, small-scale votes of its workforce. If we do not self-regulate and cap this structural centralization, regulators will eventually do it for us, and the outcome will be far worse for the entire ecosystem.
Let’s protect the individuals, but let’s also protect the protocol from corporate capture.
@TokenLogic@WintermuteGovernance and other delegates, are you planning to vote? 600K NAY from Labs/Stani-controlled wallets is unacceptable for a supposedly decentralized project. If you want to prevent SEC security classification due to centralization, please vote with the community. Your vote matters.
41K VP delegated from 0xe705b1d26b85c9f9f91a3690079d336295f14f08, labeled by Nansen as “Stani Kulechov, Public Figure, Gnosis Safe,” to a ghost address with zero outgoing on-chain transactions.
Finding 3, 112K VP whale, funding path and ENS trail
0xdC0990910F47aD479020eD77B0d62BF738C2791a votes with 111,885 VP from self-held tokens. Two Snapshot votes in its entire history, both NAY, both on proposals affecting Aave Labs.
At block 9,800,000, the old ENS registrar deed for kulechov.eth resolves to deed owner 0xDaC706632A11379f707A12E036B9Aae89Af20F1d. On-chain ENS registry data, not a Nansen label.
If a single compensated service provider can deploy ~600K VP through undisclosed wallets to block a governance reform, that capability applies to everything: budgets, service provider elections, protocol upgrades.
Formal decentralization means nothing if one entity can silently veto proposals through wallets nobody knows they control. The on-chain record shows this just happened, on a vote about whether such connections should be transparent in the first place.
I have previously called this dynamic a slow motion coup. This analysis is the evidence.
The same cluster voted as a block on the AAVE Token Alignment proposal in December 2025. Same ghost addresses, same delegation structures, same undisclosed coordination. A pattern, not an incident.
Closing
On-chain votes remain valid under current rules. The issue is undisclosed control.
The record shows 592K NAY VP from interconnected wallets tied to one service provider, voting against a proposal that asks controllers of voting power to disclose their addresses.
If Aave Labs disputes this analysis, the simplest rebuttal is to publish the full list of voting addresses under their control. That is, after all, exactly what this proposal asks for. If these wallets are not theirs, transparency costs them nothing. If they are, then this vote has made the case for mandatory disclosure better than any proposal text ever could.
Vote closes February 13. The data is on-chain. Every address in this post is verifiable.
ACI is a service provider to the Aave DAO. This analysis uses on-chain transaction data, archival Ethereum state, and Nansen Pro labels. All referenced addresses are independently verifiable.
Hi there, Evgeny (Wintermute) here to provide some opinions on this proposal
Disclosures. Generally very supportive on disclosures side as long as they don’t dox people. I.e. would be helpful to know that wallet belongs to aave labs employee or aci employee, but would be against making it a social norm to have a name under each address. We have enough wrench attacks already
Don’t really see the “so what” around this. Some people raised concern that this introduces a weird secondary governance layer and I agree it does
I don’t support voting abstention under current wording as it is too broad. In my opinion most of the long term proposals touch Labs, ACI and many other contributors indirectly one way or another and it would be unfair to restrict first order effect recepients whie not restricting the second order effect ones
More general thoughts:
I support disclosures in general as a good rule of thumb for governance transparency. I don’t support restrictions on voting since there is no good framework I can rely on to copy paste. In tradfi a shareholder can and will vote on something that will positively affect them and there is no issue with that. Basically my position is: If Stani (or Marc) want to raid AAVE treasury, they should be able to vote for it with their tokens as long as they make it clear it is them who vote for it. This way everyone will have ample time to exit the token if they feel there is a coup/takeover attempt etc (or alternatively organize resistance to one). But this has to be a social norm, not a governance enforced two-tier voting system
It’s rather unclear how to implement these disclosures. Could be as simple as having ENS names in these wallets (aave_labs_employee_42690.eth). Would not be supportive on introducing complex structures controlled by third party systems
I think quadratic voting and any other alternative voting mechanisms are both unproven and lack any logical sense. If people hold aave tokens they should be entitled to vote on things 1-to-1. Skin in the game
I’ve seen few references to SEC/Clarity act etc. First of all, none of these regulations are voted into law yet. Secondly, they wont be retrospective. Thirdly we don’t even have the final wording either, so it’s very premature to impose restrictions on governance. Once the law passes and we know when it actually comes into effect, we can totally see how governance should be addressed to not get into issues on regulatory side (if this is what we collectively think is important)
This is precisely why full disclosure is non-negotiable. We are looking at a 600K VP cluster—controlled by Labs and Stani—effectively vetoing transparency. If Aave has shifted to a ‘Labs-only’ dictatorship, token holders deserve the truth so they can re-evaluate their positions and exit. A governance token with no power is a stranded asset.
We must be prepared, not forced to deal with it, we should have corresponding countermeasures, not be completely controlled by AAVE labs, we have had enough.
This makes a total mockery of “decentralised” finance and also the Aave token itself with the great utility of governance that just gets vetoed at the whim of Aavelabs. And this is not even taking into account the possible Sec issues. The clownshow continues unabated.
Just saw this posted on AAVE Discord channel by Ghost.ofstories. I think its valuable context to add it here.
This is what Marc Zellar @MarcZeller has called a Liquid Representative Democracy and has historically supported this system, because, looking at his voting history (and the aci wallet), it’s easy to see he votes in his own interest and for his own bags, using the dao as a Trojan horse. This is further confirmed by his shady merit program that both him and Nandy have confirmed is a way to farm users.
Ignas @Ignas runs a KOL agency, and has a deal to maintain 20k aave to collect orbit delegate funds. So he’s just abusing people who get emotional to drive engagement and make money
Over 90% of ezraels @EzR3aL delegation power comes from one single wallet. So there’s likely a deal here to farm the orbit program as well.
All of this is at the expense of the token holders
ACI doesn’t support this system anymore because they have failed to act upon their duties as a BD service provider, and their attempted coup at the end of 2025 failed.
I originally began trying to work on aave via the dao, but I work at Aave Labs because that’s where all of the innovation happens. Labs built every core version of the protocol, a front end that drives 90+% of aave protocol usage (and thus it’s revenue), and now a consumer app that’s going to reach an audience that ACIand BGD don’t believe is valuable.
Theyve stagnated, V3 is at max capacity for use cases, and there’s nothing left for them to do but cause drama. Just look at their Twitter, Marc hasn’t doesn’t any positive tweets about the protocol in months. It’s all just his own ego and self interest.
Aave Labs never stagnated, while they were jumping on podcasts and tweeting about baseless accusations surrounding governance politics, we secured a 10M deal, got V4 audited again and made significant progress on both V4 and the consumer app.
$AAVE and Aave will win, that is the goal of Labs, and it always has been. I’m not sure the other SPs can say the same, and the orbit delegates are just not even in the required realm of context.
