Aave DAO Votes Down Proposal for Brand Ownership

Aave token holders voted against a contentious governance proposal aimed at transferring control of the protocol’s brand assets to a DAO.

On Friday, the snapshot poll concluded with 55.29% voting “NAY” and 41.21% abstaining. Only 3.5% of voters endorsed the proposal.

The proposal asked whether Aave (AAVE) token holders should reclaim control over Aave’s domains, social media handles, naming rights, and other intellectual properties through a DAO. Supporters framed the change as a move towards decentralization and addressing brand stewardship concerns.

The rejection marked the end of a tense governance episode for Aave, one of the largest lending protocols in decentralized finance (DeFi). It underscored how timing, escalation, and participant involvement can influence governance results within a DAO.

Community members cite deeper token-equity tensions

Beyond the vote, the rejection revealed deeper concerns among key token holders regarding the nature of value capture and governance at Aave.

Wintermute founder and CEO Evgeny Gaevoy stated on X that the trading firm opposed the proposal while urging Aave Labs to commit seriously to long-term alignment.

Gaevoy emphasized that addressing token value capture is crucial not just for Aave, but also for the wider crypto ecosystem, noting that success in this area could serve as a benchmark for other protocols facing similar issues.

Meanwhile, pseudonymous Lido advisor Hasu characterized the disagreement as indicative of a more fundamental issue with token-equity dual structures.

In a post on X, Hasu argued that integrating governance tokens with separate equity entities leads to misaligned incentives that are “fundamentally broken” and complicates effective governance.

Hasu remarked that while such structures arose from a necessity during regulatory scrutiny, long-term investors perceive them as transitional rather than permanent.

“As a long-term investor in Aave, I hope all stakeholders can unite to create a solution that aligns everything under a single token or equity structure,” Hasu expressed.

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Governance tensions built ahead of the final vote

The rejection followed days of debate over the proposal’s pathway to a vote, as a governance conversation spiraled into a wider conflict over procedure and authority.

Critics had previously voiced objections to fast-tracking the proposal to snapshot while discussions were still active. Some claimed this approach limited engagement and undermined governance standards.

The dispute arose as Aave founder Stani Kulechov faced scrutiny regarding governance influence. Kulechov reportedly acquired $10 million AAVE tokens prior to the vote.

Community members contended that the situation exposed structural vulnerabilities in token-based governance, where significant holders can significantly sway outcomes.