The Decentralised Aave DAO began voting on a new conflict-of-interest policy on Tuesday. It was inspired by Aave’s “slow-motion coup,” according to one delegate. But critics say enforcing the ban would throw the DAO into chaos. Tension between Aave Labs and the Aave DAO has quieted somewhat, as members of the latter await a promised revenue sharing proposal from Labs CEO and protocol founder Stani Kulechov.
The latest example came last week, when Aave Chan Initiative, one of the most powerful delegates within the DAO, proposed a new conflict-of-interest policy. That policy would require any recipient of Aave DAO funding to disclose the fact they had received, or plan to seek, such funding, and require abstention in any DAO matter presenting a conflict of interest. The disclosure would have to include the addresses of any wallets that hold Aave voting power or delegated voting power.
“Without clear, consistent disclosure and COI norms, governance can drift into perceived capture or legitimacy debates that harm the DAO, the protocol, and the $AAVE token,” the proposal reads. Such rules, it continues, would improve transparency, accountability, and “the perceived legitimacy of outcomes.” Things get tricky when the proposal turns to enforcement, however. Voting restrictions can’t be “reliably enforced” onchain and would have to rely on peer pressure, according to ACI.
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