How AAVE will win

[Emereb]

I get the CEO analogy and I largely agree with the structure, stable cash for OPEX + long-term upside for alignment. I’m a founder myself, so I’m very familiar with cash + equity/vesting as a healthy incentive model.

The nuance here is that Aave Labs isn’t an individual, it’s a private entity with meaningful fixed costs and growth spend (team, infra, legal/compliance). If day-to-day OPEX and growth aren’t funded primarily with stable but with AAVE, the rational outcome is selling to cover unexpected expenses, and creating uncertainty which will affect us.

What seems healthiest to me is stable / cash-like funding for OPEX (transparent budget + runway), and AAVE vesting / performance-based upside (milestones/KPIs), so Labs earns more when it delivers measurable value without forcing immediate selling selling, but this should be their proposition, not ours.

To keep the core debate clear, compensation design is negotiable. The non-negotiable part for long-term trust is transparent, enforceable guardrails around Aave-branded surfaces and any off-protocol monetization (who can change fees, where revenues flow, under what rules).

Right now, what’s missing (at least for me) is clarity on intent and governance, why was the recipient address changed, who had permission to do it, and what is the proposed framework going forward? If the goal is to fund product growth/OPEX, that can be legitimate but it should be explicit, transparent, and governed. Until we remove this grey area, markets will keep pricing uncertainty and governance credibility will suffer.

We should remember that the protocol and its brand ultimately need to be governed in the best interest of token holders, with clear mandates for contributors. Aave Labs doesn’t need permission to build, but Aave-branded monetization should not be changeable unilaterally outside DAO-approved guardrails.

I believe in DEFI, I believe in decentralized governance, I believe in AAVE.

[EzR3aL]

I think the previous comments include everything that had to be said, now its up to Labs to prove it.

All I can add here is that actions speak louder than words. So time will tell us all if this DAO was meant to be the dream and desire, or necessity.

[phenk53]

Agreed. The vision is there, but execution is what will rebuild confidence. Clear delivery and predictable value flow are what ultimately matter for token holders and the broader community.

[activeminer]

I hear you Stani, and to a degree I can see where you are coming from. As you stated above, you don’t want to lose sight of the initial development or the reasons behind AAVE. I’ve read everyone’s comments in reply to your post as well for an understanding of what is going on, and in regards to the views of supporters. To be honest, I find it interesting, yet can also understand why some others out there who are that way inclined would try and sabotage 8+ years work. I have a lot of ideas that could benefit both Aave and DAO at the same time, working together, but how much do we keep to our chest in a public forum such as this. I’m definitely not saying that there is, but any one person could come in here and look for another angle to sabotage further progress. That is a shame, but we have to treat it like a business, treating it like global entity that is which is branching off into Aave and DAO. The same mindset will help us move forward, and the realization that it will be, and has the potential to overlap key players in the industry. But going back to the mindset of a global entity, and the thing that they are known to be very good at, is creating a monopoly, and this is exactly where Aave can create, build, find managers like ourselves, those who care about the in-house projects being developed and delivered to holders and those looking to work with the currency.

We can see the work that you are doing, but as long as you stay true to Aave, your core values are in order, with every step moving us closer to each goal that has been set. You know what you want, and that’s why we are here. Action is key, any moves forward are positive, and we’ve got you. It’s a positive step to get the Apple App in store. Please look into the Android App version asap for the brothers and the millions using these devices.

Stani, how much funding is available for further development, for in-house projects that could benefit both Aave, and DAO?

[Gross]

The “Hybrid Foundation Model”: A Structural Solution to the DAO vs Labs Friction

Friends, we should look for ,or find,a solution in a short, clear, understandable, and transparent way.

There may be missing parts or areas that need improvement, but in my opinion, anyone who truly wants the development of DeFi, decentralization, and Aave should approach it this way.

Those who think otherwise are most likely acting in their own interest and trying to fill their pockets with money.

I could write in fancy, long sentences full of technical terms, but there’s no need there’s no need to deceive each other.

Here is my “Accelerated Hybrid Model” proposal: Ending ambiguity, securing IP ownership, & unlocking Startup-like speed.

DAO (Brain): Sets annual strategy & budget, holds the ultimate power.

Foundation (Shield): Legally holds Brand/IP on behalf of the DAO. Eliminates “divorce” risk.

Labs (Engine): The “Service Provider”. Builds the code & product.

Solving the Speed Issue:

Via “Optimistic Execution,” Labs executes fast within its mandate without waiting for daily votes. The DAO retains a “VETO” (Kill Switch) power.

Secure AND Agile. This is institutional readiness. .

Experienced individuals can develop this and put it to a vote.

[Nandy.eth]

I appreciate the proposal. However, I believe Layer 2 and Layer 3 should operate in parallel, not hierarchically.

There is no clear advantage in having a service provider attached to and funded by a foundation. Service providers already have a direct mandate from the Aave DAO through streaming payments, and that model is functioning effectively.

That said, I do support the creation of a legal entity (e.g., a foundation or trust) whose sole purpose is to hold the IP and legally represent the DAO. I’m aligned with that direction.

The choice of entity type should be guided by external legal counsel. Many service providers already operate through similar structures, and several of our existing partners and institutional counterparts can recommend experienced legal firms to advise on this setup.

[Gross]

This structure can also operate in parallel, side by side. With a more detailed review of the gaps and a refined schema, a fast and efficient setup can be achieved if there is genuine intent to do so.

For the Aave DAO, the Cayman Islands are often preferred for establishing a legal foundation due to their flexibility and non shareholder structure. However, for greater institutional credibility, jurisdictions such as Switzerland, or alternatively the Marshall Islands and Liechtenstein due to their digital innovation friendly legal frameworks, are also viable options. There are multiple workable paths once the topic is researched objectively.

Instead of long, complex discussions, the issue can be resolved very easily through short, clear, outcome driven, and transparent steps. The moment personal interests and incentives take precedence, however, no solution becomes possible which is precisely the situation we are facing today.

[ApuMallku]

When can we expect a formal proposal? @AaveLabs @stani

Sufficient time has passed, and with Ernesto’s perspective now clear, we have everything needed to build a comprehensive framework that eliminates future ambiguity.

This needs to be finalized before AAVE V4 releases—that’s the critical deadline.

[KRCHOIPOPPY]

Talking too much is a defensive strategy to anticipate and counter backlash

The root cause of this problem is that Aave is growing, but the AAVE token fails to reflect that growth.

While Aave’s growth is important, I believe now is the time for aggressive marketing and investment in the value of the AAVE token itself. If you prove the token’s value, the market will respond

For example, Dogecoin has no fundamental value, yet it maintains a top 10 position solely through marketing.

Undervaluation doesn’t happen by accident, whether in crypto, stocks, or commodities. We must identify and fix the underlying cause

[ApuMallku]

12 days have passed since this post. Uncertainty about IP ownership, branding, and fee structure keeps growing. This needs to be resolved before AAVE V4 releases.

Also, what happened with the World Liberty deal? Why didn’t we win it? I remember Stani bragging on X about “the art of the deal.” Where did that go?

[axieaur]

the request for a specific date when we can expect a formal proposal is fair. important to keep the momentum going on this important topic and get this figured out to avoid more infighting in public. it’s a bad look for the brand and decreases trust. let us figure this out, both sides make concessions, and position ourselves structurally long term to trust each other and win.

[ApuMallku]

Has ignoring community questions become the new norm?
Is this part of Labs’ @AaveLabs updated communications strategy? I recall leadership acknowledging they had done a poor job with communications in the past and committing to improvement. So far, that statement isn’t aging well.
When can we expect a clear proposal addressing community concerns? @stani
Are we going to continue playing hide and seek indefinitely? After the failed snapshot, it’s evident that Labs possesses sufficient voting power to implement whatever they choose—defunding service providers, changing parameters unilaterally, etc. We’re heading toward the most centralized outcome possible, which undermines the necessary steps to become a truly decentralized project. The snapshot revealed this reality.

Critical unanswered questions:
These are the most relevant questions that remain unanswered. It’s essential that any proposal from Aave Labs comprehensively addresses each of them:
1. Operational impact of IP transfer: If the DAO assumes legal ownership of Aave’s IP, domains, and branding, then grants an exclusive, broad operating license back to Aave Labs to maintain current operations, what specific business or technical capabilities would Aave Labs lose that it currently possesses?
2. Interface license change: Why was the Aave interface repository license changed in November 2023 from the open-source BSD-3-Clause to “All Rights Reserved © Aave Labs” without any prior consultation, notification, or DAO vote?
3. Legal basis for IP ownership claims: Given that the Aave brand and ecosystem have been funded and built by the community and token holders for years, under what legal or ethical basis does Aave Labs claim exclusive ownership of the IP and the unilateral right to decide revenue sharing from new products?
4. Conflict of interest resolution: How does Aave Labs plan to resolve the inherent conflict of interest between its private equity investors and $AAVE token holders regarding value capture from new developments like Aave V4 and the new Aave App?
5. Token value proposition: If $AAVE token holders have no claim over the brand, IP, domains, or revenue generated by software developed under the “Aave” name, what is the fundamental value proposition of the token beyond non-binding votes on a protocol that Labs could theoretically abandon or fork?
6. DAO treasury allocation breakdown: Can Aave Labs provide a detailed breakdown of how much DAO treasury funding has been allocated to developers and teams who were simultaneously working on IP that is now being claimed as the exclusive private property of Aave Labs?
7. DAO’s brand restriction rights: Does Aave Labs acknowledge the DAO’s right to restrict use of the “Aave” brand for any product that does not provide a direct and transparent revenue stream to the Aave Collector?
8. Legal complexity contradiction: Why is Aave Labs characterizing the transfer of assets to the DAO as presenting “complex legal risks” while simultaneously using the DAO’s resources to solidify a brand that it maintains under private control?
These questions deserve substantive answers, not silence.
The community has been patient. We need
clarity before V4 launches and before any further governance decisions are made. Transparency and honest engagement are the foundation of decentralized governance—without them, we’re just performing theater.

[PatrickB]

It is quite frustrating as a longterm aave user and holder that these questions remain ignored and unanswered. It does not inspire confidence. I watched a press conference with Ursula Von der Leyen recently where all questions had to be sent in before the press conference to be vetted, similar vibes here of late.

[stani]

Hey, can confirm that nothing has changed since the post and proposal is being worked on, which creates solutions to the questions above.

Thanks for checking is as its an important topic.

[ApuMallku]

I specifically asked when we can expect this proposal because it’s critical it’s submitted before the Aave V4 proposal goes live. We need to avoid repeating this circus.

[Gross]

@Stani, we fully respect that finalizing a robust legal structure takes time. However, the information vacuum is creating unnecessary uncertainty for AAVE holders and the community.

Could you share a small “directional signal” (a spoiler)?

Specifically, can you confirm if the new structure is converging towards the Foundation/Parallel Model? Sharing just the general direction without binding details would greatly reassure AAVE holders and the community right now.

[Millesimillia]

Dear all, am I correct to assume that the elefant in the room is how the AAVE DAO could be implemented in the form of a real company? I guess only then it can hold assets and own liabilities. AAVE holders would become shareholders and related questions (e.g., What oracles are used as bridges?, How to run a company with decentral shareholders?) would emerge. Warm regards, Samuel

[Nandy.eth]

This quite important that @AaveLabs post make this proposal ahead of Aave v4 activation

[ApuMallku]

They’ll likely do the opposite. That’s been the pattern so far.

[EzR3aL]

Great to see that there is something being worked on.
Are other SP or major delegates involved in the creation of this proposal?

Because thats what ultimately led to this situation, that the rest of the DAO wasn’t aware whats going on.

This should be avoided to happen again.

Happy to support here as well.