Back in October 2025, in addition/separate to our Phase 6 scope for services proposal, we presented to the community the idea of Project E, a potential line of products by BGD Labs optionally building on top of licensed codebase of Aave, an in exchange, applying a revenue share on the applicable products of 55% to the Aave DAO and 45% to BGD Labs.
We want to inform the community that we will NOT be proceeding with the Project E line of products, using the Aave codebases as a base.
The reasons for this decision are the following:
We evaluated different product ideas, but in all of them, a clear conflict arises: maximising the business of Project E’s product based on Aave while separately contributing to the Aave DAO fully owned products (e.g., being a service provider) implies an adversarial position towards maximising the DAO’s interests.
That approach doesn’t work for us, both business-wise and principles-wise, as it creates a situation where either 1) a hypothetical product of Project E would be limited in scope and not fitting go-to-market requirements or 2) Project E would compete with the DAO’s products.
The previous debate about ownership of the DAO over Aave’s IP, branding, and communication channels has shown that building products on Aave is not a flat field based on merit: one entity (currently Aave Labs) has centralised control over communication channels (hence promoting those products directly and indirectly, or perception wise given legitimacy to them), while everybody else does not. And that, or will not change, or will change however and whenever that entity wants.
A clear example of this is the just-published 2025 update of “Aave” by Aave Labs, where the full focus is, aside from high-level metrics, exclusively on products by Aave Labs, the majority of which are not even live. While keeping out major developments of 2025, like big improvements on the dynamism of Aave v3 (risk management, technical), or the release of Aave Umbrella, the coverage mechanism of the whole Aave ecosystem.
We understand and accept that’s the status quo, but building anything with revenue share on this type of scenario simply makes no sense for us, as it is not only for the benefit of the DAO, but towards the entity (Aave Labs) having a privileged position in the ecosystem.
The Aave v3 protocol is powerful and battle-tested; we really believe products deriving from it can have market-fit, as it has certain properties (e.g., maturity and being a market leader’s infrastructure) difficult to replicate.
However, there has been a pretty much unilateral decision to promote v3 as a legacy system (with high opposition to organically improving it, no matter the value it could bring, as seen here from representatives of Aave Labs), and focus on a totally new system, v4. While initially we were optimistic about overcoming this type of under-promotion of the v3 system, considering the current communication strategy on Aave channels, and the position of Aave Labs about ownership of them, it seems like an uphill effort for little reason.
Once again, we respect this focus on v4 versus v3 going forward, given that it is DAO-approved and, end of the day, not our decision; but we don’t agree with it for several reasons. And that placed Project E on-chain products on the lending space in a paradoxical scenario: develop something based on Aave v3, while the base system being promoted as legacy and “worse” than v4, which already hurts market positioning of the product to start with; or develop based on v4, a system still in final phases of development and release which still needs to show its virtues.
The idea of Project E not progressing doesn’t mean at all we will not build our own projects integrating Aave in the future. But if so, they will be that, integrations like any other team/product doing the same on top of e.g., Aave v3, and not building on top of Aave codebases and applying any revenue sharing.
Needless to say, this decision has no implication on our current scope for services with the Aave DAO.
This is my biggest concern: one entity has unilaterally seized power without any governance vote. This isn’t merit-based competition or free market principles—it’s a monopolistic power structure masquerading as decentralization.
Thanks @bgdlabs for all your hard work. We will keep pushing for a better environment.
I was very excited to see Project E happening, but all the arguments presented in this post are absolutely understandable.
I would have decided the same way myself.
Thanks for still contributing
Stuff like this is what worried me about the whole “civil war” and centralization of power by AAVE Labs. While I don’t really agree with Project E (in general I have a few misgivings about AAVE V3’s pool design and believe it’s the wrong path to fragment liquidity into specialized pools), it is disheartening to see service providers abandon potential work due to implied political pressure by AAVE Labs. There needs to be a way for the DAO, regardless of whether it is making the correct decisions at the correct time, to fully control its destiny offchain as well as onchain. Otherwise I fear AAVE will eventually turn into another Sky/MakerDAO where it’s dominated by a select few personalities and is a “D”AO only in name.
At ACI, we acknowledge @bgdlabs’ decision to discontinue Project E.
We share and echo the concerns expressed in this post. Unfortunately, it reinforces a broader dynamic we are observing: Aave is starting the year with what looks like declining motivation among some of the ecosystem’s most important builders and contributors.
This is, ultimately, game theory. When one actor has unilateral decision power and an asymmetric relationship to the system, other contributors rationally update their expectations about the upside and agency of their work. That update reshapes incentives, and over time it reshapes participation.
From the DAO side, meaningful efforts have been made to improve the situation. To date, they have largely been met with responses ranging from dismissal to clear contempt, and without actionable commitments toward improvement.
First of all, huge respect to @bgdlabs. Choosing ethics and principles over easy money is a rare stance in this industry. Walking away from a revenue stream because it conflicts with the DAO’s interests is a masterclass in integrity. You chose to stand with the DAO rather than being complicit in an unethical setup. That is real leadership.
@Stani, it is time to stop the political theater and sit at the table. The games are over. We are past the point of ambiguous handshake deals. At this stage, there are only clear options: Either the DAO acquires Aave Labs for a set price, you transition to a standard service provider role under a Foundation, or we part ways entirely.
What we are witnessing feels like a slow motion coup. The strategy of delegitimizing V3 to pave the way for a 100% takeover is transparent. It is obvious that Labs is stalling, cutting off communication channels, and buying time to finish V4 using DAO funds. The plan seems to be building the new code with our money, keeping the IP and the brand, and then migrating the liquidity while locking the DAO out.
To the Aave DAO, major partners, OGs, community leaders, and developers: We need a unified front immediately. Please, set up a dedicated channel be it a private Discord or a War Room and start making executive decisions. The silence from Labs is a calculated tactic.
We need to act now. Either we buy out Labs and secure the protocol, or we prepare to launch a clean slate with a new brand and frontend. Stani is clearly suffering from power intoxication. If we don’t organize now, we are financing our own capture.
What a pity, the current dynamics only benefits a major entity, Aave Labs, and undermines the motivation of the rest of service providers to create new products for the Aave DAO.
Now that intentions are clear since December, contributors can adjust their own roadmaps to focus on their own endeavors, and move on.
