The world of decentralized finance (DeFi) has been rocked by controversy surrounding Aave Labs, a key player in developing the Aave Protocol. Recent revelations have shed light on an ownership dispute, sparking debates over revenue allocation and governance within the Aave DAO (Decentralized Autonomous Organization).
What Triggered the Controversy?
The Aave community is now grappling with a dispute involving Aave Labs, service providers, and the DAO. Historically, the DAO funded and managed the protocol’s development via contributions to contractors like Aave Labs. Features such as branding, user interfaces, and associated fees were entirely funded by DAO resources, which in turn retained ownership. However, this balance was disrupted after recent integrations.
One critical turning point involved the replacement of ParaSwap with CowSwap, a move that redirected swap fees away from the DAO treasury to CowSwap’s private services. Critics claim this shift sidelined the DAO, marking a substantial loss of at least $10 million annually. According to one delegate, this translates to approximately $200,000 in lost revenue weekly.
A Battle for Governance
Amid the uproar, several delegates have voiced concerns. Marc Zeller, head of the Aave-Chan Initiative, called Aave Labs’ privatization of protocol revenue a direct attack on tokenholders. Louis, a prominent VC partner, warned that independent equity ventures threaten the core concept of decentralized governance, urging AAVE tokenholders to take a firmer stance.
Aave Labs’ Defense
Stani Kulechov, the founder of Aave, defended the contribution of Aave Labs to the protocol, emphasizing eight years of innovation. He noted that the development of features like Aave V4 and GHO protocols has directly benefited the DAO and its revenue streams. Data from Blockworks Research also supported Aave’s influence, revealing over $15 billion in net deposit flows during Q3 of 2025.
Price Action and What’s Next for AAVE Token
Currently, AAVE token prices remain steady around the $200 mark, unaffected by the ongoing governance debates. However, tokenholders and community participants are advised to closely monitor the resolution of these issues, as they may impact the long-term future of Aave governance and token value.
How to Stay Informed
If you’re an investor or simply interested in DeFi developments, staying updated is crucial. Tracking AAVE’s updates through reliable financial insights platforms is key to making informed decisions.
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