In recent weeks, Aave’s community members have become increasingly divided regarding the control of the protocol’s brand and associated assets. This has intensified an ongoing conflict between the decentralized autonomous organization (DAO) and Aave Labs, the centralized developer firm that plays a significant role in building Aave’s technology.
This debate has garnered considerable attention as it encapsulates a key challenge faced by many major crypto protocols: the friction between decentralized governance and the centralized teams that often lead implementation. As these protocols grow and their brands gain value, the question of who ultimately controls those assets—token holders or builders—becomes increasingly urgent.
The contention was sparked by Aave’s integration of CoW Swap, a tool for executing trades, which resulted in swap fees being directed to Aave Labs instead of the DAO treasury. While Labs contended that this revenue was a reflection of development work at the interface level, critics pointed to a deeper concern: who ultimately holds the reins over the Aave brand, which has over $33 billion locked in its network. This question has taken center stage in discussions about the ownership of Aave’s trademarks, domains, social accounts, and other branding elements.
Those in favor of DAO control argue that such a proposal would align governance rights with those who assume economic risks, limit the unilateral authority of a private company, and ensure that the Aave brand represents a protocol that is governed and funded by token holders, as opposed to a single builder. Proponents of maintaining brand control with Aave Labs argue that ceding this control could hamper development efforts, complicate partnerships, and obscure accountability for utilizing and promoting the protocol.
This proposal has sharply divided community members, with adversaries and proponents presenting very different visions for Aave’s future.
Support for Labs
Ave Labs backers assert that the company’s continued oversight of Aave’s brand and related assets is crucial for the protocol’s competitive execution at scale. They assert that Aave’s ascent in DeFi is closely linked to Labs’ operational independence.
“What should be given greater consideration in these discussions is how much of Aave’s success can be attributed to Aave Labs/Avara, and the difficulties in running a genuine company as a DAO,” stated Nader Dabit on X, a former employee of Aave Labs. “DAOs are structurally incapable of delivering competitive software. Every product decision requires a governance proposal, each pivot needs consensus from token holders, and any fast-moving opportunity probably gets lost in a forum thread while competitors forge ahead.”
From this viewpoint, Aave Labs’ management of the front-end assets has facilitated quicker iterations, enhanced accountability, and smoother interactions with partners—particularly those in traditional finance who require recognizable legal counterparts. Advocates warn that transferring brand control to a DAO-led legal entity could stall efforts at a pivotal time.
KPMG’s George Djuric has argued that constraining Aave Labs within a grant-dependent or closely monitored operational framework would risk turning builders into political actors rather than product teams. He noted that such a structure could suppress innovation by compelling established developers to become “politicians singing for their supper” each funding cycle.
Other supporters also disputed the claims that brand control implies economic extraction from the DAO. They emphasized that revenue generated at the protocol level remains entirely within DAO control, and that monetization at the interface level—like swap integrations—is aimed at funding ongoing development that ultimately benefits the protocol. They see Labs’ contributions as expanding the overall economic landscape, thereby enhancing the DAO’s long-term earning capacity rather than diminishing it.
An Aave Labs spokesperson did not provide a response to requests for comment by the time of publication.
DAO Control of Branding
Advocates for DAO control over branded assets argue that the issue isn’t about hindering private companies from developing products but rather about aligning ownership with where execution and revenue generation currently takes place.
Marc Zeller, a longtime Aave contributor and founder at Aave-Chan Initiative, expressed in an X essay earlier on Tuesday that the DAO has evolved into the engine that manages risk, implements upgrades, and generates recurring revenue, while brand assets serve as the storefront. DAO proponents do acknowledge that Aave Labs continues to develop and maintain much of the protocol’s tools. However, they argue that ultimate authority over upgrades, funding, and risk has transitioned to governance, with Labs fulfilling the role of a core service provider alongside other contributors funded and overseen by the DAO. Issues arise when a single private entity maintains control over the storefront while the DAO ecosystem operates the engine.
A significant portion of Aave’s growth across multiple market cycles has been driven by independent external teams that assist in operating and updating the system—efforts that ultimately deliver value back to the DAO. If branding and distribution remain under the control of a private organization, DAO supporters contend that token holders will struggle to exert influence over how Aave is depicted, monetized, and directed long-term.
The concerns center on structural issues rather than personal ones, Zeller emphasized. If ownership of branding and distribution lies outside the DAO, token holders will have limited leverage regarding how the protocol is represented, monetized, or directed in the future. The proposal posits that DAO ownership, with delegated management under enforceable conditions, accurately mirrors how Aave functions today.
“The situation between the Aave DAO and Aave Labs is arguably the most significant ongoing debate surrounding tokenholder rights currently,” remarked investment partner Louis Thomazeau on X, highlighting the broader implications of this disagreement for tokenholder governance frameworks. “This isn’t just a concern for Aave tokenholders; it resonates with all tokenholders observing this situation with increasing trepidation.”
“Stani is mistaken if he thinks we’re “tired” of discussing tokenholder rights,” added Sam Rushkin, a research analyst at Messari, on X.
As of the most recent results, approximately 58% of votes cast thus far oppose the transfer of ownership of Aave-related assets to the DAO, with around a third of voters choosing to abstain. The voting period is slated to end on Friday.
Read more: Aave has seen an 18% decline over the week as the dispute affects the token more deeply than major cryptocurrencies.
