Following the CoW Swap incident, the Aave DAO community began to question whether the governance structure of the decentralized lending protocol Aave needs to be re-evaluated, particularly the relationship between the Aave protocol, its governance body Aave DAO, and the profit-driven company Aave Labs that is primarily responsible for development work.
Aave DAO community initiates action to regain sovereignty
Recently, a user named tulipking proposed a radical proposal in the governance forum, advocating that Aave DAO should obtain control over Aave Labs' intellectual property rights through a 'poison pill' lawsuit, including published code, brand trademarks, and even company equity.
The so-called "poison pill" litigation is an extreme governance strategy that uses legal and ownership means to make any attempts to privatize or centralize the protocol costly and unsustainable. The goal of the proposal is to completely reshape the control over this decentralized lending protocol and ensure that ownership ultimately returns to AAVE token holders.
This action, referred to by tulipking as a "sovereignty declaration," represents an escalation in the internal discussion within the Aave community about "who truly owns Aave." Core controversies include: how the protocol's revenue should be distributed, and whether Aave's ultimate control lies with the DAO or Aave Labs.
Tulipking wrote in the proposal:
"This is a defensive 'poison pill' measure aimed at preventing the DAO from being centrally controlled and ensuring that all value ultimately flows back to AAVE holders. Aave Labs has, without the DAO's approval, monetized through the brand, front-end, and user base, effectively privatizing assets that should belong to the community."
The proposal echoes Marc Zeller's previous criticism of Aave Labs for "implicit privatization." Marc Zeller pointed out that Aave Labs unilaterally introduced CoW Swap, causing hundreds of thousands of dollars in ETH transaction fees generated by the front-end exchange function to flow to Aave Labs' private address, while in the previous integration with ParaSwap, the related revenue entered the Aave DAO treasury.
Tulipking further argued that if Aave Labs is unwilling to proactively share profits and governance rights, the DAO should "fully reclaim everything," including:
Obtain full intellectual property rights and brand control of Aave.
Recoup historical revenues obtained by Aave Labs through Aave branded products.
Take over Aave Labs' company equity and convert it into a "subsidiary fully owned by the DAO."
However, since tulipking's proposal skipped the "temperature check" process, the proposal discussion thread has been closed. Tulipking must resubmit the proposal for a temperature check to restart the discussion.
The CoW Swap incident triggered governance conflicts.
According to previous reports, last week a token holder questioned Aave's recent integration of CoW Swap on the front end, pointing out that this integration seems to divert revenue that should have flowed to the DAO to a private address of Aave Labs, igniting intense community discussions. This matter involves several key figures, including Aave Labs CEO Stani Kulechov and Aave Chain Initiative (ACI) founder Marc Zeller, both of whom are among the most representative figures in the Aave ecosystem.
In response, Aave Labs CEO Stani Kulechov acknowledged that the integration of CoW Swap indeed interrupted an existing revenue source for the DAO, but he emphasized that this is a "front-end/product layer" action unrelated to the protocol's smart contracts, and therefore the revenue should rightfully belong to Labs. He also stated that this switch improved user experience, including better price execution and MEV protection, and that Aave Labs itself has a responsibility to commercialize the front end. However, Kulechov also acknowledged some criticisms, admitting that the decision "should have been discussed in the community beforehand and increased transparency."
The most important proposal in Aave governance history.
Marc Zeller stated that tulipking's proposal is "the most important proposal in Aave governance history" and may have a long-term impact on the DAO model and governance token valuation methods.
He emphasized that ACI, as an initiative organization of the DAO, has made significant contributions to the Aave ecosystem over the long term, and there exists a kind of "tacit agreement" in the community that the DAO allows Aave Labs to use its brand and IP, in exchange for the revenue generated from the front end aave.com to flow back to the DAO.
This debate also continues the long-standing governance dilemma in the cryptocurrency industry: "Can the rights of governance tokens truly align with company equity?" Is there a fiduciary duty of "not harming the interests of token holders"?
Similar issues have recently arisen in other cases, such as Circle acquiring the Axelar team while excluding tokens, which has also sparked discussions.
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