Title: Call to Avara Leadership: Propose Value Accrual for AAVE Token Holders
Author: Apu Mallku
Date: 2025-12-22
Summary
This proposal is an explicit call to Avara’s leadership, especially Stanislav Kulechov, regardless of the outcome of the upcoming $AAVE token alignment. Phase 1 - Ownership snapshot. We request that Avara Labs present, for the first time, a concrete proposal that accrues value to AAVE token holders. If clarity is not provided, the community may be forced to consider alternative paths, including a hard fork of the interface and complete rebranding.
Abstract
The DeFi ecosystem has recently witnessed a positive precedent with Uniswap’s Unification Proposal, where Uniswap Labs synthesized years of community demands regarding token utility and value accrual. Avara is moving in the opposite direction from this emerging DeFi standard.
Token holders deserve clarity on what ownership means. In TradFi, shareholders have clear rights and value accrual mechanisms. This is an opportunity to establish new rules that benefit all stakeholders in DeFi.
We call on Avara to either:
- Propose meaningful value accrual mechanisms for AAVE token holders, or
- Accept that the community may need to consider a hard fork and rebranding to protect token holder interests
Motivation
The Uniswap Precedent
Uniswap recently passed a groundbreaking Unification Proposal that addresses years of community concerns about token utility. Uniswap Labs demonstrated leadership by aligning protocol ownership with token holder interests.
Avara is moving in the opposite direction.
The Core Question: What Does Token Ownership Mean?
In traditional finance, shareholders have clear rights, governance powers, and value accrual mechanisms. In DeFi, these rules are still being written. AAVE has an opportunity to set a positive precedent—or a terrible one.
Token holders funded Labs’ development for years through the DAO treasury. Yet we face:
- No clear utility for the AAVE token beyond governance theater
- Attempted launch of a second token (Horizon) that would have diluted AAVE holders
- Unilateral addition of interface fees without DAO consent
- An Aave v4 that we don’t know how staking works
- No revenue sharing
- IP & domains’ ownership retained by Avara, not the DAO
- Use of aave.com to promote Avara’s products without token holder benefit
The Equity vs. Token Conflict
There is an undeniable conflict between Avara’s equity interests (including potential IPO considerations) and AAVE token holder interests. This conflict has never been addressed transparently.
We’ve had sufficient debate to recognize this problem exists. Now we need solutions. Consider the reading of this article Token vs Equity by Jake Chervinsky.
Specification
This Temp Check calls for Avara to take one of the following actions within 30 days:
Option 1: Propose Value Accrual Mechanisms (Preferred)
Avara should present a comprehensive proposal that includes one or more of the following:
- Revenue sharing mechanisms for AAVE token holders
- Token buyback or burn programs funded by products revenues
- Clear utility for the AAVE token within the Aave ecosystem
- Transparent cap table disclosure to clarify equity vs. token alignment
- Commitment to operate as a service provider to the DAO, not as IP owner
- Fee sharing from Avara’s use of DAO-funded infrastructure (aave.com, brand, etc.)
Stani should follow Hayden Adams’ example and propose a unification framework that aligns all stakeholders.
Option 2: Community Considers Alternatives
If Avara refuses to provide clarity and concrete value accrual mechanisms, token holders may be forced to consider:
- Hard fork of the Aave interface: The DAO can deploy a community-owned interface
- Complete rebranding: Establish a new brand fully owned by token holders
- Migration to DAO-owned infrastructure: Remove dependency on Avara-controlled assets
This is not the preferred option, but Avara’s lack of transparency, refusal to answer direct questions, and rushed governance processes leave token holders with few alternatives. Are we here to defend equity’s stakeholders or token holders?
Rationale
Why This Matters Now
- Market signals: AAVE/ETH is at YTD all-time lows despite market conditions. The market is pricing in the lack of token utility and broken trust.
- DeFi precedent: Uniswap has set a new standard. Aave risks being left behind as the “misaligned” protocol while competitors embrace token holder alignment.
- Trust is broken: Recent governance controversies, rushed proposals, and lack of substantive responses have shattered community trust. Only concrete actions can rebuild it.
- Time sensitivity: The upcoming Aavenomics Upgrade snapshot represents a critical juncture. Regardless of outcome, token holders need clarity on their ownership rights.
Why Avara Should Act
For Avara’s benefit:
- Restore market confidence and token price
- Establish Aave as the leader in DeFi governance standards
- Remove governance uncertainty that hampers protocol growth
- Align all stakeholders for long-term success
For token holders:
- Clear understanding of what AAVE ownership means
- Concrete value accrual mechanisms
- Protection of investments made through years of DAO treasury funding
For DeFi:
- Establish best practices for token/equity alignment
- Prove that decentralized governance can work effectively
- Set positive precedents for other protocols
Implementation
Success Metrics
This Temp Check is successful if it generates:
- Substantive response from Avara leadership (not PR spin)
- Concrete proposal for AAVE token value accrual
- Transparent disclosure of equity/token conflicts
- Commitment to operate as DAO service provider
Risk Analysis
Risks of Action
- Relationship strain: This proposal may strain relationships with Avara
- Execution complexity: Hard fork path involves technical and coordination challenges
- Market uncertainty: Governance controversy may impact AAVE price short-term
Risks of Inaction
- Continued value destruction: AAVE token utility remains zero, price continues declining
- Precedent for DeFi: Establishes that token holders have no real ownership rights
- Loss of competitive position: Other protocols (Uniswap, Morpho, etc.) move ahead with aligned governance
- Irreversible trust damage: Community faith in DAO governance evaporates completely
The risks of inaction far exceed the risks of demanding clarity.
Next Steps
- Community discussion on this Temp Check (5-7 days)
- Delivery of formal request to Avara leadership
- 30-day response period
- Evaluation of response and next steps
Conclusion
This is a pivotal moment for Aave. Token holders have funded this protocol’s development for years (since the ICO). We deserve clarity on what our ownership means.
Avara can lead by example—as Uniswap Labs has done—and propose genuine alignment between equity holders and token holders. Or they can continue the current path, forcing token holders to protect their interests through alternative means.
The choice is Avara’s. But token holders will no longer accept governance theater in place of real ownership rights.
We are not asking for Labs to leave. We are asking for Labs to propose how AAVE token holders finally get the value they deserve.
Discussion Questions
- Is 30 days sufficient time for Avara to respond substantively?
- What specific value accrual mechanisms should be prioritized?
- Should cap table disclosure be mandatory or optional?
- What are the technical requirements for a potential hard fork?
- How can we ensure this doesn’t become adversarial but rather constructive?