Governance disputes in DAOs are rarely just about process. They’re about power, trust, and who really controls the levers when things get uncomfortable. At the center of the dispute is a governance proposal titled ARFC $AAVE token alignment. The proposal would place Aave’s core brand assets under explicit DAO control, including domains, social media handles, naming rights, GitHub organizations, NPM namespaces, and other channels currently stewarded by Aave Labs, BGD Labs, and related contributors. It also introduces anti-capture safeguards, DAO-controlled legal structures, and enforcement mechanisms if brand assets are misused or withheld.
The conflict is not about the destination. It’s about how the DAO was pushed there. The proposal’s original author, Ernesto Boado, former Aave Labs CTO and BGD Labs co-founder, publicly disavowed the Snapshot submission. According to Boado, the proposal was moved forward without his consent, without notice, and while community discussion was still active. He described the action as a breach of trust and urged tokenholders either not to vote or to abstain, arguing that participation would legitimize what he sees as an improper escalation.
Boado was not alone. Prominent delegates, including Marc Zeller of the Aave Chan Initiative, echoed concerns that the proposal was rushed without resolving open questions or achieving broad consensus. A major point of contention was timing. Advancing a contentious vote just before the holiday period, when coordination among large holders and institutions is typically weaker, raised red flags. Zeller also pointed to recent shifts in delegation power, suggesting the optics of the vote were skewed toward outcome rather than legitimacy.
Aave Labs has pushed back hard against claims of misconduct. Its position is simple: the rules were followed. According to the firm, the proposal had completed the required five-day review period under the Aave Governance Process Document v1. Once in the ARFC stage, moving to Snapshot was not optional but compliant with the documented lifecycle. From this perspective, calls to extend discussion were political preferences, not governance requirements. Labs also rejected the idea that author consent is needed to proceed with a vote. Encouraging abstentions, the firm added, does not improve governance integrity. It merely changes voting math.
On the question of holiday timing, Aave Labs dismissed accusations of bad faith outright. DeFi, as the spokesperson put it, does not pause for Christmas. While governance arguments played out across forums and social media, the market delivered its own verdict. The AAVE token dropped more than 10 percent over 24 hours, reflecting investor unease as internal conflict spilled into public view. This episode did not emerge in a vacuum. It follows weeks of friction inside the Aave DAO, including allegations that revenue from CoW Swap integrations bypassed the DAO treasury. What this really means is that Aave has reached a maturity point where informal trust is no longer enough. As ecosystems scale, governance becomes less forgiving of shortcuts, even when those shortcuts are technically compliant. Whether this vote ultimately passes or fails, the deeper issue will linger. Can Aave reconcile strict rule-based governance with the social legitimacy that DAOs depend on? Or will procedural compliance continue to clash with community expectations of consent and deliberation? For now, the Snapshot vote moves forward. But the outcome may matter less than the precedent it sets, and the trust it either restores or further erodes in one of DeFi’s most closely watched DAOs.
Aave Labs faces backlash after moving to a Snapshot vote on a proposal that would formalize brand ownership under the DAO. The ARFC $AAVE token alignment plan would place Aave’s core brand assets—domains, social handles, naming rights, GitHub organizations, NPM namespaces, and other channels—under explicit DAO control, with anti-capture safeguards and enforcement mechanisms.
Ernesto Boado, the former Aave Labs CTO and BGD Labs co-founder, publicly disavowed the Snapshot submission, saying it was moved forward without his consent and while community discussion was still active. He described the action as a breach of trust and urged tokenholders either not to vote or to abstain, arguing that participation would legitimize what he sees as an improper escalation.
Prominent delegates, including Marc Zeller of the Aave Chan Initiative, argued the proposal was rushed without resolving open questions or achieving broad consensus. A major point of contention was timing, with advancing a contentious vote just before the holiday period raising red flags due to weaker coordination among large holders and institutions. Zeller also pointed to recent shifts in delegation power, suggesting the optics of the vote were skewed toward outcome rather than legitimacy.
Aave Labs defended the move, stating the governance process was followed and that the ARFC stage had completed the required five-day review under the Governance Process Document v1. They rejected the idea that author consent is required to proceed, and argued that calls to extend discussion were political preferences, not governance requirements. Encouraging abstentions, they said, does not improve governance integrity and merely changes voting math. On the holiday timing, Aave Labs dismissed accusations of bad faith outright, noting that DeFi does not pause for holidays.
Market reaction mirrored the governance debate, with AAVE dropping more than 10% in the 24 hours after the dispute went public. The decline underscored how internal governance concerns can spill into price dynamics. This episode follows weeks of friction within the DAO, including concerns that revenue from CoW Swap integrations bypassed the treasury. Regardless, the governance episode tests whether Aave can reconcile strict rule-based processes with the social legitimacy DAOs rely on as ecosystems scale. The outcome of the Snapshot vote may matter less than the precedent it sets for governance norms in DeFi.
The decline underscored how internal governance concerns can spill into price dynamics. This episode follows weeks of friction within the DAO, including concerns that revenue from CoW Swap integrations bypassed the treasury. Regardless, the governance episode tests whether Aave can reconcile strict rule-based processes with the social legitimacy DAOs rely on as ecosystems scale. The outcome of the Snapshot vote may matter less than the precedent it sets for governance norms in DeFi.
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