Rejection of the Brand Control Structure Proposal Reflects a Split in Aave Governance

On December 25th, leading DeFi protocol Aave experienced a pivotal moment when the token holder community decisively rejected a proposal to transfer brand ownership rights to a DAO. The vote, involving 1.8 million AAVE participants, set a record for attendance, with 55.29% voting against, 41.21% abstaining, and only 3.5% supporting the initiative.

What Was Actually Decided in This Historic Vote?

The proposal titled “[ARFC] $AAVE token alignment. Phase 1 – Ownership” suggested that AAVE token holders take control of brand assets including the domain, social media accounts, and naming rights from Aave Labs. A new DAO control structure would be established with safeguards to prevent abuse.

Data shows a clear picture of community sentiment:

• 994,800 AAVE (55.29%) - Against the proposal
• 741,600 AAVE (41.21%) - Abstain
• 63,000 AAVE (3.5%) - Support

Many token holders criticized the timing of the vote as rushed, especially considering it took place during the international holiday season while discussions about communication strategies and Aave Labs’ actions were still ongoing.

Root of the Dispute: From DEX Integration to Revenue Flows

The tension triggering this proposal began in early December when governance delegates discovered that the CoW Swap integration by Aave Labs into the official app.aave.com interface had redirected exchange fees—estimated at up to $10 million annually—into a wallet controlled by Aave Labs, not the DAO treasury.

Comparison with the previous ParaSwap integration became a major controversy. At that time, the results were meant to be shared with the DAO, sparking accusations of “quiet privatization” and misalignment between private developers and token holders.

Industry Leaders’ Reactions to Community Decision

Stani Kulechov, founder and CEO of Aave Labs, explained on X that this vote is “an important productive discussion for the long-term health of Aave.” He committed to making the economic alignment between Aave Labs and token holders more transparent.

Stani also commented on the recent announcement of a $$15 million AAVE buyback, emphasizing that the funds were not used to influence the vote. “This is my life’s work,” he said, underscoring his personal commitment to the protocol.

Marc Zeller, founder of the Aavechan Initiative, initially supported the “ABSTAIN” option, indicating that the circumstances were not ideal for such a decision given the tight timeline and ongoing debate. However, he later acknowledged the “massive” 1.8 million AAVE votes, stating “DeFi will win.”

Evgeny Gaevoy, co-founder and CEO of Wintermute and an AAVE holder, highlighted a “clear mismatch of expectations between AAVE Labs and a large portion of token holders” across various aspects. Wintermute voted against the proposal, agreeing that further clarification was needed to make it practical.

Current Market Data and Broader Context

At the time of writing, AAVE is trading at $164.59, down 0.34% in the last 24 hours, with a market cap of $2.50B and a daily trading volume of $3.18M.

Interestingly, on the same day the Aave proposal was rejected, another Ethereum DeFi protocol, Uniswap (, approved the long-awaited UNIfication governance proposal, which included burning 100 million UNI and enabling fee switch activation. This contrast illustrates different dynamics within major DeFi protocol governance.

Implications for the Future of DAO Governance

This event sets an important precedent for future DAO votes. The widespread rejection of the proposal indicates that the community prioritizes transparency and aligned interests over blind trust in the development team. Control structures involving token holders seem to be an increasingly demanded feature within the DeFi ecosystem.