TL;DR
- Governance Clash: Aave Labs escalated a brand‑rights proposal to Snapshot, sparking accusations of unilateral overreach.
- Revenue Dispute: Critics allege CowSwap integration diverted $10M annually from the DAO, fueling decentralization concerns.
- Market Fallout: AAVE price dropped over 10% to $159.86, reflecting shaken confidence amid governance turmoil.
The Aave ecosystem is facing one of its most turbulent governance episodes yet, as disputes over brand‑asset ownership and revenue allocation collide with a sharp market downturn. Aave Labs’ decision to escalate a token alignment proposal to a Snapshot vote has triggered accusations of overreach, while revelations about redirected swap fees have intensified scrutiny. The controversy has already weighed heavily on AAVE’s price, which fell more than 10% in 24 hours, underscoring the stakes of the ongoing governance crisis.
The recent DAO alignment proposal has been moved to Snapshot after extensive discussion. We realize the community is very interested in a path forward and is ready to make a decision.
Time for tokenholders to weigh in and vote.https://t.co/QwoPeglhmU
— Stani.eth (@StaniKulechov) December 22, 2025
Governance Rift Deepens
Aave Labs advanced the “ARFC $AAVE token alignment Phase 1 – Ownership” proposal to Snapshot, aiming to give token holders control over domains, social handles, naming rights, and other brand assets. Founder Stani Kulechov framed the move as a step toward clarity after extensive discussion. Yet critics, including proposal author Ernesto Boado, condemned the escalation as unilateral and “disgraceful,” arguing it bypassed community debate. Delegates such as Marc Zeller warned that the timing, coinciding with the holiday period, undermines legitimacy and risks alienating large holders.
We acknowledge @aave unilaterally escalated the proposal to Snapshot without resolving discussion, without clear consensus, and without consent from @eboadom
We’ve posted our position in response to this unprecedented interference in the DAO governance process.
Worst outcome… https://t.co/80kEpYjikP pic.twitter.com/860GUfavvL
— Marc ”七十 Billy” Zeller (@Marczeller) December 22, 2025
Revenue Controversy Fuels Anger
Parallel to governance tensions, allegations surfaced that Aave Labs redirected millions in swap fees from the DAO treasury. The integration of CowSwap, replacing ParaSwap, allegedly diverted up to $10M annually away from token holders. An Orbit delegate noted ParaSwap had generated about $200,000 weekly for the DAO. Critics argue this undermines decentralization, while Aave Labs insists frontend revenue is voluntary and distinct from protocol earnings. The dispute has amplified calls for stricter oversight of founder influence.
CEO Opposition and Escalation
Despite initiating the Snapshot vote, Kulechov himself declared he would vote “no,” insisting a structured process was needed rather than a binary decision. His stance further inflamed critics, who accused him of interfering in DAO governance. Zeller labeled the move sabotage, claiming the December 26 deadline was deliberately set during low participation. Supporters countered that monetizing brand assets is a pragmatic incentive for continued platform development, highlighting deep divisions within the community.
Market Impact and Outlook
The governance turmoil has already hit AAVE’s market performance, with the token sliding to $158, down over 10% in a day. For many, the price drop reflects shaken confidence in decentralized governance and the balance of power between token holders and Aave Labs. As voting concludes, the outcome will not only determine control of brand assets but also signal whether the DAO can resolve disputes without eroding trust in its long‑term vision.
