[TEMP CHECK] Activating DAO-Owned $AAVE for Governance Sovereignty

Governance
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[TEMP CHECK] Activating DAO-Owned $AAVE for Governance Sovereignty

Author: ApuMallku

Date: 2026-01-31

Simple Summary

This proposal seeks to authorize the use of $AAVE tokens held within the Aave Collector (Treasury) to participate in governance votes. This mechanism is essential to counteract the centralization of power exposed in recent votes and to ensure that the DAO’s future is decided by its broader community and Service Providers, rather than being dictated by Aave Labs’ private interests.

Abstract

The recent [ARFC] Aave Token Alignment Phase 1 vote served as a definitive exposure of the “centralization trap” within Aave. Despite significant support from independent holders and several Service Providers for a transition of ownership, Aave Labs utilized its concentrated voting power to force a “NAY” outcome, effectively silencing the majority of stakeholders.

To break this hegemony, the DAO must activate its own $AAVE (refer to TokenLogic’s tracker). This is no longer just a debate about branding; it is about reclaiming the protocol from a private monopoly that is currently stifling innovation and destroying market value.

Motivation

  1. The Failure of Centralized Governance: The recent Phase 1 vote proved that under the current status quo, the community’s will is irrelevant if it conflicts with Aave Labs’ private control. This centralization is no longer a “risk”—it is a documented reality.
  2. The BGD Wake-Up Call: The recent post by Ernesto from BGD Labs regarding “Project E” is the final proof of the damage caused by this centralization. When our most elite technical SPs abandon projects because they cannot compete in a “fair game” against Labs’ gatekeeping of the brand and IP, the ecosystem is officially in a death spiral.
  3. Market Destruction & Gaslighting: Since this drama began, the $AAVE token has lost over 35% of its value, dropping out of the Top 50. Instead of taking responsibility, Labs has resorted to using employees to gaslight the community on social media.
  4. A Fair Building Framework: Aave must be a neutral platform. Core assets (aave.com, trademarks, IP) must be owned by the DAO. This proposal ensures that the DAO has the “voting fire-power” to enforce this transition and protect itself from predatory practices.

Specification

  1. Governance Activation: Implement the technical mechanism to allow $AAVE tokens in the Collector to be delegated or used in governance.
  2. Consensus Alignment: The Collector’s voting power will be utilized to support the majority consensus of non-Labs-affiliated Service Providers and independent delegates.
  3. Mandatory IP & Neutrality Mandate: This voting weight will be prioritized to push through the legal transfer of all IP to the DAO, ensuring a level playing field for all developers (including BGD, Labs, and any third party).

Proposer’s Note (ApuMallku)

For years, we were told Aave was a DAO. The Phase 1 vote and the BGD “Project E” situation have proven otherwise: it is a private company with a community-funded treasury. We are tired of the ambiguity, the delays, and the professional arrogance of those who claim to be “owners” while wiping out 35% of our market cap.

If Labs chooses to vote NAY on this proposal, they will be confirming their intent to keep the DAO’s resources hostage. It is time for a reality check: the DAO is the protocol.

Next Steps

  1. Poll: Should the DAO activate its treasury-held $AAVE to restore balance and defend against centralized capture?
  2. Technical Implementation: Define delegation parameters for the Collector’s $AAVE.
  3. Snapshot Vote.
5 Likes
When can we expect an Aave Labs response?
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I fully agree with your proposal as it makes perfect sense. I actually submitted a proposal yesterday myself but the strange thing is that not a single DAO leader or experienced figure has commented, good or bad. The silence and lack of reaction to what is happening right now is interesting and very odd.

It feels like someone is walking in, robbing our house in plain sight, and seizing what belongs to us. That is the simplest way to describe it. Why is the DAO doing nothing? I am forced to ask this. The other side is doing everything in their power to capture the protocol, actively and systematically.

The DAO’s operational structure needs a review because governance cannot just be about voting anymore. Maybe the DAO should operate under a Foundation umbrella where specific roles are defined and reasonable fees are paid to actually manage the protocol.

This silence is meaningless. The DAO is probably waiting for the proposal Stani plans to present this month, but since that proposal wasn’t built together with the DAO and strategic partners, guessing a 1% acceptance rate isn’t impossible. Your proposal is reasonable and logical because doing the opposite is just against the flow of life.

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Hello everyone and thank you for following the guidelines straight from the beginning.

I’m trying to breakdown my own and personal opinion as a delegate but also Aave Tokenholder like many or most of you.

I get where this proposal and the recent comments from several old DAO member but also newly joined ones is coming from, it’s frustrating and annoying to wait for something without knowing what’s going on and I agree here, communication hasn’t improved by Labs.

Now, instead of agreeing or disagreeing with the statements in this proposal I would like to share my view on activating the token for VP.

Technically speaking this isn’t a problem, something that can be done pretty easy and fast. But we have to think about the consequences and the goal of this.

Because in the end we should be all looking for a good resolution for the DAO, SP, Tokenholder and of course the protocol itself. Only this will solve the current situation of not knowing what’s going on or what’s going to happen.

Instead of fighting more, we should be looking to actively resolve the situation and right now it’s Aave Labs that need to address it very fast.

So if I had to vote, I would probably vote against this, as I think the treasury should remain neutral.
Another angle that could be explored is to create rules for SP and maybe also orbit delegates.
For example that any actively engaged SP is not allowed to monetize on top of Aave.
If they want to do so, they have to end their SP mandate and not receive any kind of compensation stream.
This would make sure that the SP focuses 100% on his work towards the DAO instead of his own and private revenues streams.

A good example was Bgdlabs dropping project E for exactly this reason.

Work for the DAO and get paid or leave the DAO and make money by building on top. There is no in between.

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Thank you, @EzR3aL. I completely take your point on Treasury Neutrality. I agree that keeping the Treasury out of the ‘voting wars’ is the healthiest path for Aave’s long-term technical integrity but we are not in a healthy environment right now.

However, this leaves the DAO in a Sovereignty Paradox: we are maintaining an ‘enforced neutrality’ with our resources while Aave Labs is free to use its massive, non-neutral voting power to dictate the future of our IP and branding.

If the Treasury must be neutral, then the Service Providers (SPs) must be transparent. We cannot have a neutral vault and a compromised governance floor at the same time.

To ensure a fair building environment—and to prevent more ‘Project E’ exits—I propose the following ‘Governance Integrity’ framework:

  1. Mandatory Service Provider Disclosure: Any entity receiving DAO funding must disclose all addresses under their control or influence. This is not a request; it is a condition for payment. If you take the community’s money, you owe the community absolute transparency.

  2. The ‘Skin in the Game’ Voting Standard: We must establish a permanent restriction on Conflict of Interest votes (IP transfer, branding, or legal disputes where Labs or an SP is a party):

• The Restriction: Any voting power derived from Genesis tokens, Team allocations, or DAO-granted incentives must be restricted in these specific votes to avoid a ‘rigged’ outcome.

• The Exception: These entities may only vote using tokens proven to be purchased on the open market with their own capital.

The Bottom Line: If we can’t use the Collector to balance the scales, we must ensure the scales aren’t being tipped by shadow-voters and conflicted proxies. If an SP is building for the DAO, their loyalty belongs to the $AAVE holders, not to the private interests of Aave Labs.

Let’s bring transparency to the voting floor. What does the community think about making SP payments conditional on this level of disclosure?

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This is an interesting idea but a very complicated one as well. Who would decide how the Treasury votes? Wouldn’t it be the same people or organizations that are already voting? It could possibly backfire.

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Agreed. That is exactly why I believe that before taking such a major step, we must first establish a clear set of rules and mandatory disclosure from all Service Providers.

I’ve detailed a framework for this here: [TEMP CHECK] Activating DAO-Owned $AAVE for Governance Sovereignty - #5 by ApuMallku.

We should focus on solving the transparency and conflict of interest issues first, as that is the foundation for any real governance.

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Thanks for your work @ApuMallku I understand the motivation, but we should be careful with the long-term precedent of turning the Treasury into a voting weapon. If we do this once, it becomes a governance tool that can be captured later.

A more durable path is to fix governance integrity first, we need something closer to a “constitution” for Aave governance clear, testable principles like :

(1) duty of loyalty when operating Aave-branded assets,
(2) mandatory disclosure / conflict-of-interest rules for funded parties,
(3) neutrality rules for official surfaces,
(4) due process.

Then, if someone believes those principles are being violated (including on IP/brand stewardship), we should have an internal Integrity / Constitutional Committee (with rotating jurors selected from qualified delegates + bonded/staked participants) that can review evidence, hear responses, and publish a recommendation to the DAO (non-binding, but actionable: funding freeze, steward replacement, escalation to a formal proposal).

As part of that due process, the committee could also define mandatory disclosure and recusal expectations for parties with a direct conflict (e.g., stewards of Aave-branded assets, recipients of monetization flows, DAO-funded entities) on votes that affect them. We can’t “ban” wallets from voting in a permissionless system, but we can make this enforceable through DAO mandates and funding, refusing to disclose/recuse should trigger consequences (e.g., mandate review, steward replacement, funding suspension, or revenue escrow), so decisions are judged on arguments and governance legitimacy, not raw voting power alone.

In short, before arming the Treasury, let’s build the governance guardrails and an internal dispute-resolution mechanism. That’s how we become anti-fragile and transparent while acting only in the DAO’s interest.

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EzR3aL and Emereb, I fully share your democratic stance on not weaponizing the Treasury. However, we must never forget the BGD Labs and Project E incident. If BGD had not stuck to their principles and instead colluded with Labs, we would be facing a nightmare scenario for the DAO today. This is why rules alone are insufficient; we need radical transparency regarding financial flows. Who is working under what terms, and exactly how much they are being paid, must be public down to the last cent. Only then can we prevent backroom power plays and establish a true balance.

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I agree that the long-term solution you propose is ideal. Improving governance rules should be a top priority for our current Service Providers, and ACI certainly has the knowledge and experience to lead that charge.

However, we must be honest: we cannot afford to be decentralization purists right now while malicious behavior is actively draining the protocol’s value. My proposal is a necessary ‘patch’ and an exemplary measure for the short term. We have to take responsibility for the fact that these governance loopholes exist because we were too trusting. We all assumed the DAO owned the IP, branding, and domains, only to find out they were being ‘kidnapped’ by Aave Labs.

We need to act now to shield our governance from further abuse. Once we have secured the foundation and corrected these predatory practices, we can take the time to build the perfect, healthy framework for the long term. Hence, my proposal is the following, I am willing to change this temp check for something like this one:

Proposed Emergency Governance Patch: Integrity & Disclosure Framework

To stop the “governance capture” and restore market trust, I propose moving this TEMP CHECK toward the following mandatory standards:

1. Mandatory Address Disclosure (The “Transparency Rule”)

  • Requirement: Every Service Provider (SP) receiving a single AAVE from the DAO must disclose all addresses under their control or influence.
  • Enforcement: This disclosure is a non-negotiable condition for stream payments. No transparency = No funding.

2. Conflict of Interest Voting Restriction (The “Real Skin” Rule)

In any vote regarding IP, Branding, legal assets or funding where the holder is a counterparty (e.g., Aave Labs/Avara or affiliated SPs):

  • Restricted Tokens: Any voting power derived from Genesis allocations, Team vesting, or DAO-granted incentives is suspended.
  • Eligible Tokens: Only $AAVE tokens proven to be purchased on the open market (secondary market) are eligible to vote.

3. Ethical Abstention Mandate

  • In matters of “DAO vs. Labs” interests, any entity with private equity ties to Avara must voluntarily abstain from voting to avoid the “Judge and Jury” paradox.
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I formally request the closure of this proposal. Thank you all for the feedback. A new, much more specific proposal will be coming that will address the economic vectors that are being drained.

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As requested by OP I am going to close this post.

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I believe this patch is clearly needed, and no one acting in the best interest of Aave should vote against it.

A few remarks:

  1. Disclosure
    Disclosure should be mandatory for anyone who currently has an active stream from the DAO, or has had one in the past. It should also be mandatory for anyone applying to be compensated by the Aave DAO.

  2. Voting restrictions
    Voting restrictions can’t realistically be enforced at the onchain vote level. Trying to do so would likely create more issues than it solves. At best, this can be a soft, social-contract rule, where DAO participants treat conflicted votes as illegitimate.

On the rest, no objection. ACI has self-enforced this principle: we delegate our own $AAVE voting power to other delegates because it makes sense from an ethical standpoint. That said, proposal power should not be restricted: it is needed to execute work and does not compromise DAO neutrality in the same way voting does.

  1. Ethical abstention
    Ethical abstention due to conflicts of interest should be universal, not limited to a single topic. We have also self-imposed this rule so far for the same reasons.

Finally, no Temp Check is needed. Updating the framework can be done according to governance rules via a simple ARFC addendum.

7 Likes