The Aave Chan Initiative (ACI), one of the most active governance groups within Aave DAO, has announced it will shut down following a dispute over transparency and voting power tied to a record budget proposal from Aave Labs.

The conflict centers on a proposal called “Aave Will Win,” which seeks up to $51 million in stablecoins and 75,000 AAVE tokens to fund development, marketing, and expansion related to Aave V4. Although the proposal passed its first vote with about 52% support, ACI argued that wallet addresses linked to Aave Labs voted in favor of their own funding request without sufficient safeguards or disclosure.

ACI said it requested stricter onchain milestone tracking and limits on self-voting before supporting the plan, but those conditions were not addressed. The group claimed the episode demonstrated a lack of space for independent service providers if major budget recipients can influence their own approval.

Over the next four months, ACI will wind down operations, cancel its funding streams, and open-source or transfer its governance infrastructure. The shutdown follows the recent exit of BGD Labs, raising broader concerns about decentralization and governance concentration within Aave.

Despite the governance turmoil, Aave’s lending and borrowing operations remain unaffected, with smart contracts still live and other service providers continuing their roles.