A significant internal power struggle is gripping the Aave ecosystem as key stakeholders clash over the control of vital brand assets and financial flows. This escalating conflict, centered around a token alignment proposal, has not only sparked heated debate among the decentralized finance (DeFi) platform's leadership but has also sent ripples through the AAVE token's market value.
The Core Dispute: DAO Control vs. Aave Labs
At the heart of the contention is a token alignment proposal aiming to transfer control of Aave's brand assets, including its domain, naming rights, and social media handles, from Aave Labs to the decentralized autonomous organization (DAO). Aave founder and CEO Stani Kulechov, who also heads Aave Labs, has vehemently opposed this initiative, publicly stating his "no" vote and advocating for a more structured resolution process. Kulechov further escalated the issue by moving the vote from the governance forum to Snapshot, allowing individual token holders to participate. This move, however, drew sharp criticism from figures like Marc Zeller, founder of the Aave Chan Initiative, who denounced it as "interference in the DAO governance process."
Allegations, Escalation, and Market Reaction
The proposal emerged following allegations that Kulechov had directed an estimated $10 million in annual DAO revenue to Aave Labs, a move critics argue undermines AAVE tokenholders and their value accrual programs. While Kulechov's supporters view Aave Labs monetizing some brand assets as a necessary incentive for continued platform development, the broader community remains divided. The ongoing internal escalation has had a palpable impact on the AAVE token, which saw a 10% dump in 24 hours and a 17% decline since the proposal's introduction on December 16, largely driven by significant whale sell-offs, including one whale offloading $37.8 million at a loss. As voting on the contentious proposal is set to conclude by December 26, amidst concerns from Zeller about the timing coinciding with a holiday period, the resolution of this power struggle remains a critical factor for Aave's future stability and market perception.
